Insights

Shortly into the New Year the self assessment tax return season is well underway, and it is as if Christmas never happened! Anyone who is required to submit a personal self assessment tax return for the 2013/14 tax year must do so online by 31st January 2015. They must also pay any balance of tax owing for the year, plus in many cases a payment on account towards their 2014/15 tax liability. Failing to submit the return on time will result in an automatic £100 late filing penalty and failing to make payment will result in an interest charge. Further late filing and payment penalties accrue if the delays continue.

Our advice is to take the necessary steps to ensure you can file on time and if you need expert help, get it as soon as possible. It is possible to appeal against the late filing penalty and taxpayers with a ‘reasonable excuse’ can challenge HMRC. But the reasonable excuse bar is a high one, is difficult to achieve and undoubtedly a very subjective issue.

In a world of online submission, postal delays no longer constitute reasonable excuse, and in a world of self assessment, nor unfortunately does relying on your professional adviser! Reasonable excuse can include incapacitating illness, bereavement or absence of records due to fire or flood for example, but only if the return is filed immediately the excuse no longer applies.

HMRC has just announced the best excuses received for late filing last year. They might be good, but interestingly, none of them actually achieved the ‘reasonable excuse’ hurdle in HMRC’s eyes. I wonder why!

Top January 2014 late filing excuses

My pet dog ate my tax return and all the reminders.

I was up a mountain in Wales, and couldn’t find a postbox or get an internet signal.

I fell in with the wrong crowd.

I’ve been travelling the world, trying to escape from a foreign intelligence agency.

Barack Obama is in charge of my finances.

I’ve been busy looking after a flock of escaped parrots and some fox cubs.

A work colleague borrowed my tax return to photocopy it, and didn’t give it back.

I live in a camper van in a supermarket car park.

My girlfriend is pregnant.

I was in Australia.

Some things never change

We thought it would be interesting to compare this list with the excuses given the previous year. There are some startling similarities, suggesting that some things never change. For instance, problems with animals and natural disasters feature heavily and people appear to think that if they are not at home when the deadline falls, this constitutes a reasonable excuse. Equally, some people believe having unusual living arrangements will get them off the hook. And clearly, the practice of trying to pass the blame onto others has remained consistent although the individuals carrying the blame are getting much more high profile; whereas last year we had excuses derived from problems with spouses and accountants, this time around, the blame is shifting to foreign intelligence agencies and Barrack Obama!

Top January 2013 late filing excuses

My pet goldfish died.

I had a run-in with a cow.

After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else.

My wife won’t give me my mail.

My husband told me the deadline was 31 March and I believed him.

I’ve been far too busy touring the country with my one-man play.

My bad back means I can’t go upstairs. That’s where my tax return is.

I’ve been cruising round the world in my yacht, and only picking up post when I’m on dry land.

Our business doesn’t really do anything.

I’ve been too busy submitting my clients’ tax returns.

Cost of HMRC penalties

In summary then, if you are required to submit a self assessment tax return on 31st January and do not meet the deadline, you will be penalised with a late filing penalty and interest will be payable on the late payment of the tax due. If the late payment continues beyond 28th February, a 5% penalty will be added to the interest due, and if the filing delay continues, additional penalties will be added.

It’s well worth being on time with your tax return!

If you would like help completing your 2013/14 self assessment tax return, please contact Lesley Stalker by emailing las@rjp.co.uk.