Q- I have one or two clients who have yet to give me the information needed to complete their 2016/17 self-assessment tax returns. I am concerned about the consequences of this and want to advise my clients of the implications.
A- Where a 2016/17 self-assessment tax return has not been filed by 31 January 2018, your client will already have been charged a £100 penalty.Online returns with a 31 January 2018 filing date will incur additional penalties from 1 May 2018. Penalties of £10 per day will be chargeable for up to 90 days.
If a 2016/17 tax return has still not been filed by 31 July 2018, the initial penalty of £100 and the daily penalties chargeable will amount to a total of £1000 and in addition, a further penalty of at least £300 becomes chargeable.These automatic penalties take no account of the amount of tax an individual owes. Even if your client owes no tax at all or is a due a refund the penalties still apply.If an individual believes they do not need to be in self-assessment, if for example, they are within the PAYE system or because they have become non-resident they can ask HMRC to withdraw the notice to file a return.
Such an application must be made within two years of the end of the tax year to which the return relates.If a return cannot be cancelled, the late filing penalties can be appealed if there is a reasonable excuse for late filing. Examples are prolonged ill-health or bereavement.Where a client has failed to register for self-assessment for 2016/17 specific rules apply where there is a failure to notify. Penalties are based on the amount of tax lost as a result of the failure to notify an increase if a deliberate behaviour is involved.