HMRC Deadlines and Penalties: All you need to know!

HMRC Deadlines and Penalties: All you need to know!

Keeping up with your HMRC obligations is not always easy. Life can get in the way and suddenly we have missed a filing date or not paid our tax on time. Today’s post covers all the important HMRC deadlines for sole traders and limited companies.

Put a big red circle around these dates on your calendar, and find out how we can help appeal HMRC decisions at Yorkshire Accountancy.

Register for Self-Assessment Deadline

Newly self-employed sole traders, new registered partnerships and people who have started receiving foreign income will need to register for self-assessment. This means letting HMRC know that you intend to submit your own tax return and declare your income for the tax year.

Registering for self-assessment comes with a deadline six months after the tax year began. Therefore, the deadline to register is October 5. Once you have registered, you will receive a 10-digit code known as a UTR to make your online account. From here you can submit your return or have an accountant do it for you.

Paper tax returns are due on October 31 in the following tax year, whereas online self-assessments can be lodged up to January 31.

Payment on Account Deadline

If this is not your first year of self-assessment, you will not need to register again. You use your existing account to file all subsequent tax returns. You may also need to make a payment on account by July 31, which is a way of spreading the costs of your tax bill based on your previous tax year’s income.

Due to COVID-19 this year, payments on account due in July do not have to be made until January 31 2021.

Penalties for Late Registration or Late Tax Payments

If you fail to register for self-assessment in time by up to three months (January 5), you will be issued with a £100 penalty. You may be able to appeal this registration penalty in some situations, such as:

  • Family bereavement close to the deadline
  • Hospitalisation or serious illness
  • Fire, flood and other unforeseen circumstances that prevented registration

Not paying your tax on time can result in more significant penalties which depend on how late the payment is and how much you owe. You may owe as much as 100% of your outstanding tax bill as an additional penalty.

The GOV UK website offers a free online calculator to estimate out how much interest and penalty you will receive. Note, this is only an estimate.

If you are unsure, it is best to speak with one of our understanding and non-judgemental accountants.

Filing Dates and Penalties for Limited Companies

Limited companies have to overcome much more paperwork throughout the year, which means trying to remember many different deadlines. This is just one more reason why having an accountant can save you from missing a deadline and being financially penalised. Even one day over can result in a £100 fine for some paperwork submissions.

Filing Company Accounts and Late Penalties

Company accounts must be filed within nine months after the year-end date. If the company fails to submit their accounts by this time, they will incur fixed penalties of:

  • 1 month = £150 penalty
  • 1-3 months = £375 penalty
  • 3-6 months = £750 penalty
  • 6+ months = £1,500 penalty

If this is the second consecutive year that the company has filed their accounts late, these penalties will be doubled!

Paying Corporation Tax and Late Penalties

Corporation tax must be paid to HMRC nine months and one day after the year-end date. Even if your corporation tax payment is a single day late, you will be fined. The fines for late corporation tax are structured as follows:

  • 1 day = £100
  • Up to 3 months = £200
  • 3-6 months = 10% of unpaid tax as estimated by HMRC (this estimate is likely to be higher and could mean your company is fined even more)
  • 6-12 months + = A further 10% estimated by HMRC

VAT Returns and Late VAT Return Penalties

VAT returns are filed quarterly. You must submit your VAT return for the most recent quarter no later than one month and seven days after the quarter has ended. Late VAT returns will also result in a penalty, but sometimes these penalties are not enforced.

Current late VAT return penalties are 2% of tax owed for the quarter, which can rise to 5% and 15% for subsequent late VAT returns.

However, the 2% and 5% penalties are not enforced for amounts below £400.

Get Help with Your HMRC Deadlines

If you need help navigating your filing obligations or to appeal a penalty decision by HMRC, Yorkshire Accountancy can help!

We keep you on track, so you don’t end up in these stressful situations. And we have successfully appealed HMRC Deadlines penalties in the past.

Let’s discuss your situation without judgement, soon!

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