Money
Tax and benefits
Tax self-assessment - how to avoid a fine
Taxpayers who miss the deadline of January 31 for self-assessment returns will be stung by a string of charges from HM Revenue & Customs
The Association of Chartered Certified Accountants (ACCA) warns that filing just one day late will still result in a £100 fine issued by the Revenue.
"The taxman is very strict when it comes to fining people for late filing and late payment, using a system of fixed penalties," said Chas Roy-Chowdhury from ACCA.
A notice of penalty for late filing is often sent by letter, which usually arrives in February, notifying of a £100 fine.
The letter will explain that if you have still not sent in your return six months later a further penalty of £100 will be imposed.
Roy-Chowdhury adds: "There is also a surcharge for late payment of tax. The Revenue will send a form in March if you have sent in your return but not paid all of the tax by February 28. There is a surcharge of 5% of the amount of tax outstanding. If you still owe tax six months after it was due, there's a further charge of 5%."
If a partnership fails to send in its return on time the penalties will be imposed on each of the partners. People could also be charged further penalties of up to £60 a day.
Despite the strict stance, there is a process appeal if you have a genuine reason, and exceptions can be made.
You will need to have, and prove, what needs to be a "reasonable excuse".
"Appealing against a penalty and surcharge from the taxman is time consuming, but winning them over with an honest account of why you are late can sometimes work," says Roy-Chowdhury.
HMRC needs to look at each case on an individual basis - not everyone is a wilful tax avoider."
Remember to speak to your local tax office if there is a problem - date the phone call and take a name of the individual you spoke to at the tax office.
The self-employed and higher-rate taxpayers are among the estimated nine million people who need to produce a tax return each year.
Next year the deadlines are changing. Paper returns will have to be with the Revenue by October 31 2008. If you file online you still have until January 31 to submit your returns.
* Holly Thomas is Deputy Personal Finance Editor at the Daily Express and Sunday Express. Holly's views represent her own opinions and are for general information only. Always seek independent financial advice.
