12 October 2015
With many practitioners starting to send out their ‘gentle reminders’ to clients for tax return information, I thought we should actually look at the criteria for completion of a tax return:
- you were self-employed
- you got £2,500 or more in untaxed income
- your savings or investment income was £10,000 or more before tax
- you made profits from selling things like shares, a second home or other assets subject to Capital Gains Tax
- you were a company director – unless it was for a non-profit organisation (eg a charity) and you didn’t get any pay or benefits, like a company car
- your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit
- you had income from abroad that you needed to pay tax on
- you lived abroad and had UK income
- you got dividends from shares and you are a higher or additional rate taxpayer
- your income was over £100,000
- you were a trustee of a trust or registered pension scheme
With the penalty regime under possible reform, there could soon be harsher penalties for non submission of tax returns. The current penalties for late filing are as follows:
|Late filing||Late payment||Penalty|
|Miss filing deadline||£100|
|30 days late||5% of tax due|
|3 months late||Daily penalty £10 per day for up to 90 days (max £900)|
|6 months late||5% of tax due or £300, if greater|
|6 months late||5% of tax outstanding at that date|
|12 months late||5% or £300 if greater, unless the
taxpayer is held to be deliberately withholding information that would enable HMRC to assess the tax due.
|12 months late||5% of tax outstanding at that date|
|12 months & taxpayer deliberately withholds information||Based on behaviour:
· deliberate and concealed withholding 100% of tax due, or £300 if greater.
· deliberate but not concealed 70% of tax due, or £300 if greater.
Reductions apply for prompted and unprompted disclosures and telling, giving and helping.