Sign up to our newsletter to get the latest from Business Advice.
Tax & admin Rebecca Smith · 23 October 2015
Thousands of the UK’s self-employed likely to face fines for late tax returns
City accountants Perrys warned that around 700,000 of the UK’s self-employed missed the deadline last year, and estimated fines this year could stretch up to affect nearly 900,000. Over ten million people filed a self-assessment tax return for 2013/14 and this is expected to rise, due to an increasing number of people having a second income stream, and around one in seven people now self-employed. The government hopes its digital tax return overhaul will remove some of the headaches many individuals and businesses currently face when it comes to filing on time, but the rollout doesn’t start until 2016 and is predicted to reach completion in 2020. Stewart Pope, chief executive of Perrys, said: ?The rules and regulations relating to self-assessment tax returns can seem confusing. Many self-employed people are unsure about where they stand in relation to completing tax returns, how they file a return or whether they should be submitting anything at all.? HMRC did waive a number of late tax return penalties in 2015, and confirmed back in May, the same would happen this year for those who can offer a ?reasonable? excuse for being late. The Telegraph reported on a leaked internal memo from the government department, which said some would be let off to prioritise larger scale tax investigations. An HMRC spokesperson said at the time: ?We want to focus more and more of our resources on investigating major tax avoidance and evasion, rather than penalising ordinary people who are trying to do the right thing.? The submission deadlines are midnight on 31 October for paper returns and 31 January for online submissions. There is an initial ?100 penalty followed by an automatic addition of ?10 a day if the tax return remains unfiled after three months. The much anticipated ?real-time? online accounts outlined in George Osborne’s March Budget, aim to end the annual rush to file a tax return on time. Instead, individuals and small firms will be able to submit accounts throughout the year via computer, tablet or smartphone. It will also allow people to pay tax at any point throughout the year. The chancellor called it a ?revolutionary simplification of tax collection?.
ABOUT THE EXPERTRebecca Smith
Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.