So what if I don’t file a tax return?
Hey, it is your choice if you don’t want to file a tax with HMRC, but they do have a list of those that are registered to do one, and even a list of people that should do one if the information has come from other sources eg oversea pension funds, letting agents for rental profits, banks for bank interest in the UK an overseas.
As a recap, should you wish to file a paper tax return, it must be done by the 31st October.
If the deadline is passed, the only option is to have it done online by the 31st January . Should HMRC advise you to complete a tax return after the 31st October, they do give 3 months grace to have it done from the date of the notice, so if you get notice to file the tax return on the 1st January, you get 3 months in total to file (30th March), but you may get charged a penalty for late notification as you should have informed HMRC you needed to do a tax return for the prior year by the 5th October.
If they do not receive a tax return on time, then they will start to issue penalties for late filing, late interest and then late payment penalties. This is even if it turns out you have no tax to pay.
Just in late filing fees, you can stack up penalties to the turn of £1600 for year one.
From day 1 to 3 months late, you can get a £100 filing fee. This is often for the very disorganised and they feel that quite an okay solution for them & they are quite happy to pay the £100 as it gives them an extra three months to get everything together for doing their tax return. Personally, I don’t see it and will keep my thoughts to myself.
From the 1st of May, then the penalty is £10 a day. Yes, I did say a day. And that goes on for three months, which then leads to £900 for a late filing penalty.
From six to nine months late for the tax return, the penalty is £300 or 5% of tax owed, whichever is the greater. And then you have the nine to 12 months late and it’s another £300 pounds or 5% of the tax owed.
For 12 months late, this can then go up to £1,600 in late filing penalties. For an actor, musician, and singer, that is a significant amount of money to pay, and well, sadly it is not tax-deductible.
I have seen this go on for several years and it’s been the case that HMRC stops chasing you and takes you out of the self-assessment system. Their rationale is they don’t know whether you have passed away, whether you’ve left the country, whether you are no longer self-employed or some other valid reason for not submitting a tax return.
However, it does not mean that all is clear and you have gotten away with it. They have ways of tracking you down. And if you want to get a mortgage, etc, then the only way you can do that is by evidence of self-employment and the income you have earned. For the mortgage proof, it is normally your SA302 and tax year overview. However, you won’t have those because you haven’t been doing your tax return.
This brings on the question, then, when do you go to jail? Well, that only really happens with tax evasion and fraud, and the jail term can be up to seven years.
There are reasonable excuses that can be used for not filing a tax return online (or by paper), but you have to file the tax return, wait for the penalty arrive, and then you can do the appeal. Typical acceptable excuses are:
- your partner or a close relative dies just before the deadline for filing your tax return;
- you are diagnosed with a severe illness around about the filing deadline;
- there are HMRC service issues and the online filing system isn’t available.
So really sorry, the tale that the dog has eaten my data is not a valid excuse.
Late filing penalties is only the start of it. If you pay late, you also get penalised.
- unpaid after 30 days, then there is a 5% charge of the tax due;
- unpaid after 6 months, then there is a further 5% charge of the tax due;
- unpaid after 12 months, then there is another 5% charge of the tax due;
Please don’t throw your hard earned money away. It’s hard enough to earn as a performer, and being organised can stop all this happening. Performance Accountancy is here to help!
Always talk to your accountant before acting on any advice. If you’d like to talk to us about your accounting requirements, please complete the contact form >>>> HERE <<<< and we’ll get in touch.
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