An estimated 1.1 million taxpayers in the UK have missed the crucial deadline for filing their annual tax returns, as reported by HM Revenue and Customs (HMRC). These individuals may now incur a penalty starting at £100 unless they can provide a valid reason for their delay.
Despite this setback, over 11.5 million people successfully completed their self-assessment in time, including an impressive 31,000 who submitted their returns during the final hour before the deadline.
It’s important to note that the requirement to file a tax return applies primarily to self-employed individuals and those with multiple income sources. Many taxpayers are diligent about fulfilling their tax obligations, but some may have encountered stress on the deadline day due to IT issues at Barclays. These difficulties may have impacted their ability to organize timely payments.
While the payment deadline was January 31, penalties for late payments will not be imposed until March 1. Barclays has assured customers that they will not suffer any financial losses due to these technical issues.
Financial Penalties for Late Filing
For those who unfortunately missed the self-assessment deadline, a range of financial penalties will apply:
- Initial Penalty: A £100 fine, applicable even if no tax is owed.
- Daily Charges: After three months, penalties of £10 per day may accrue, topping out at a maximum of £900.
- Additional Fees: After six months, a further penalty of either 5% of the tax owed or £300—whichever is greater—will be applied.
- Yearly Penalties: After 12 months, another penalty of the greater of 5% of the tax due or £300 will be imposed.
Myrtle Lloyd, HMRC’s Director General for Customer Services, has urged anyone who missed the deadline to submit their returns promptly to avoid escalating penalties.
Late Payment and Appeals
Taxpayers who have missed the deadline may also face fines for late payments, with interest accruing on overdue amounts. If you wish to contest a fine, you must submit your self-assessment before making an appeal, which can be done either through an online form or by writing directly to HMRC.
Criticism of HMRC’s Phone Services
In recent discussions, HMRC faced scrutiny over claims of a “deliberately poor” phone service aimed at redirecting taxpayers to online support. Chief Executive Jim Harra firmly rejected these allegations, describing them as “completely baseless.”
New Reporting Requirements for Online Sellers
As of January, new rules have come into force requiring online platforms such as eBay and Vinted to report sales information to HMRC. This applies to users who sell 30 items or more or earn a minimum of £1,700 through their sales. The information provided by these platforms will be used by HMRC to cross-reference with individual tax returns.
Importantly, this change does not create a new tax obligation for these sellers but rather ensures that they are paying the appropriate tax on their income.
In summary, it’s essential for all taxpayers to remain mindful of their filing obligations and the penalties associated with late submissions. For further information, consider visiting the official HMRC guidance on tax responsibilities associated with online sales.
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