Self-Assessment: How to Avoid Late Filing Penalties

If you don’t file your self-assessment tax return, HMRC will issue an automatic penalty of £100, regardless of the reason for filing late. It’s then your job to work out if you think this was fair! If it was, a payment will need to be made and your return filed within three months. If you don’t think HMRC should have penalised you, you might be able to do something about it.

How can I avoid filing my self-assessment tax return late?

Apart from the obvious responses to this, appointing an accountant is the best way of ensuring your return won’t get submitted late. Firstly because we’re focused on getting your information together earlier than you might be inclined to. Also, accountants will know which organisations are usually slower at providing information for your return.

Not having a login to HMRC’s website isn’t a problem for an accountant. Using accounting software means we can bypass the need for a login for an individual’s account.

What to do if I didn’t file my return on time?

Put simply, the first step is to get it filed! HMRC are more likely to be lenient where you were only a couple of days late and have a good reason. If you have a good reason but take two more months to file your return, they’ll be less willing to write off your penalty, unfortunately.

Can I appeal my late filing penalty?

Everybody has the right to file an appeal with HMRC. As long as your reason demonstrates that the return was late for a genuine reason, HMRC will usually reverse the penalty.

A case we see fairly often is where a taxpayer simply didn’t know they were supposed to file a self-assessment tax return – that could be because their old accountant did it without their knowledge. Usually appeals along these lines, where our clients genuinely didn’t realise they had to file a return until it was too late, are accepted and the penalty cancelled.

“I couldn’t file my return because I was called away at the last minute”

Unfortunately, HMRC doesn’t like this type of excuse. And it usually invites their “you’ve had nine months” line, which many of their advisors love to give. If they think you simply left it too late, almost regardless of why you ended up missing the deadline they will want to penalise you.

Our tips

Our main tip would be to pretend the self-assessment filing deadline is the end of December. This means that if something goes wrong at the last minute, you have a month to sort it out.

Another tip is that if you’re using an accountant, this doesn’t mean your return will go to HMRC in any eventuality. Like any business, accountants often schedule workloads weeks in advance and probably won’t have availability to help you if you turn up in mid-January!

Our final tip – the filing deadline is just over two months before you’re able to file the next tax return. So if you’ve been close to or passed your deadline, make a new (tax) year’s resolution to be one of the first to file it for the next tax year!

If you would like any more information or advice around anything accounting, please get in touch with us.