Business owners who don’t keep up with their bookkeeping on a monthly or quarterly basis will have lots of stress when the deadline comes around on the 31st January. Did you know that you also have to pay any tax owed by this date too?

If you miss this deadline the HMRC may fine you, unless you have a reasonable excuse to get an extension. The penalty for missing the deadline for filing is £100.

Don’t wait for the HMRC to send you the fine. If you think you will or (you have) missed the deadline, call HMRC directly on their free number 0300 200 3310 to discuss what has happened.

HMRC Penalty Charges

Time after your deadline Penalty
1 day £100
3 months Another £100
6 months HM Revenue and Customs (HMRC) will estimate your Corporation Tax bill and add a penalty of 10% the unpaid tax
12 months Another 10% of any unpaid tax

If your tax return is late 3 times in a row the £100 penalties are increased to £500 each.

Ultimately whether you use an accountant or if you do your own bookkeeping, filing your tax return on time is your responsibility. The HMRC wont accept blaming your accountant for filing late as an excuse. You are the director or owner of your business and that therefore makes you responsible.

What happens If your tax return is more than 6 months late?

If your tax return is 6 months late, HMRC will write telling you how much Corporation Tax they “think” you must pay. This is called a ‘tax determination’. You can’t appeal against it.

You must pay the Corporation Tax due and file your tax return and the HMRC will recalculate the interest and penalties you need to pay.

What happens if you are deliberately found to be hiding your tax or having been “careless” and have made mistakes?

If you are found to have deliberately concealed your tax the HMRC will assess how significant the error is. They may assess your abilities, for example they may hold a Financial Director more accountable than a hair salon owner. (Their words, not mine)

Deliberate mistakes are considered significantly more serious by HMRC because they indicate a clear decision that you made to break the law. The HMRC has to prove that you made this decision though!

Errors made deliberately or failure to notify are laid out in the “Finance Act 2007 and 2008”. These acts list penalties from 30% to 100% of any revenue HMRC may have lost, although the HMRC may consider reductions should the taxpayer make unprompted disclosure.

So whether your errors are “careless” or “deliberate” it matters, either way, some cases do lead to prosecution.

If you would like any help, guidance or support on how to:

  • Complete your bookkeeping
  • File your self assessment
  • Save and reduce tax
  • Items that you can and cant claim on

Then please don’t hesitate to contact us. We are friendly, qualified and we don’t judge!

Our team here at FJCM provide a quick and efficient bookkeeping service.

The pros for out-sourcing book-keeping are:

  • Frees up your valuable time
  • Saves you money
  • Expertise in business bookkeeping and best practice advice is available on tap!
HMRC Reasonable Excuse for Late Filing