Every year almost 1 million people miss their tax filing deadline. But what are the penalties for a late tax return?
There are in fact two different penalties if you file a your self assessment late. There is the penalty for filing late and this is a separate penalty for paying your tax bill late. It's important to note that even if you owe no money in taxes, or in fact are due a refund you will still be fined for filing late.
There are a series of fines applied simply for filing your return late.
So the total fines for filing a year late will come to £1,600!
If you owe a tax bill and miss the payment deadline you will have additional fines and interest in addition to the late filing fines above
So paying your tax bill a year late will lead to interest added of over 18%.
These fines are automatic, however in certain specific circumstances such as such as death of a relative, serious illness or fire they may be waived
Recently the government has announced a review of the late filing penalties and is looking into replacing them with a points based system similar to speeding tickets on a driving license. However this won't come in until 2020 at the earliest.
For now, the fines for missing the self assessment deadline can wrack up very quickly, even if you do not owe much in tax. If you are late with tax return you should file it as quickly as possible to stop the late payment fines building up. Because of this TaxScouts prioritizes late filings to help stop those fines accruing.
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