When is the 2018 Tax return deadline? How can I avoid HMRC penalties?

When filing your tax return, it’s very important you act quickly and decisively. The deadline looms, and HMRC believes there are over 11.5 million tax returns still to be filed for the deadline. Therefore, you should look to make moves as soon as you can to join the 52% of taxpayers already prepared for the year to come.

Failing to act now will lead to penalties and other issues with HMRC. As such, you should make sure you are fully prepared for the 2018 tax return deadline. You will need to have completed your return and paid any taxes owed by the due date, so don’t delay any further.

When is the 2018 tax return deadline?

The deadline for your tax return to be sent to HMRC is the 31st January, 2019. This should cover your tax details from the 6th April 2017 through to the 5th April 2018.

Another potential change comes in the development of Making Tax Digital (MTD). While this revolution of the tax program won’t arrive for some time yet, it will likely change filing dates and deadlines. At the moment, though, for 2018, you should look to make sure you have all of your taxes prepared to go for 31st January, 2019.

Why do I need to send a tax return?

You will need to send a tax return, as per HMRC guidance, if you are:

  • A self-employed sole trader who has earned more than £1,000 in the tax year.

  • Earned an annual income of over £100,000.

  • Are the director of a limited company.

  • A partner within a business partnership.

  • Received over £2,500 in untaxed income from commissions, tips etc.

  • Claim over £2,500 in expenses.

  • Renting out a property.

  • Holding foreign income.

Of course, not all of these scenarios will be applicable to you. We recommend that you should use the HMRC system to check if you need to send a tax return.

What happens if I miss the deadline?

Should you happen to miss the 31st January deadline, you will most likely receive a penalty by HMRC. Most of the time, the penalty will be a fee of £100 if you are within a 3-month period of not filing your return. Penalties are often also based on the time it takes to get your tax return in on time. For example, you could pay around £10 per day for the first 90 days late, with a maximum of £1,000 including your original £100 fine. Anything beyond six months could incur a fee of £300 or 5% of your due tax – whichever is higher – alongside the above penalties.

Stretching to over one year overdue, and you could see your fine being as severe as 100% of the due tax, doubling your original bill.

Any late payments made will also be subject to some interest, too. This is why it’s recommended that you look to avoid late filing or late payment. If you are holding off on doing your taxes because you are unsure of something or you lack experience, you should look to find professional assistance to help you avoid any penalties.

What should I do if I miss the deadline?

Of course, you could always contest the penalty if you wish. As HMRC make clear, though, this is a very specific process. You will need to make sure that you have a ‘reasonable excuse’ before going any further.

However, winning an appeal can be challenging: the excuses accepted are often only in extreme and special circumstances. Please keep in mind that any penalties will come with interest on the late payment as mentioned above. If you do need to provide a reasonable excuse, then you will often find that excuses such as extensive computer/hardware failures, unexpected illness, the death of a partner or issues with the HMRC tax system would likely count. However, it is usually entirely at the discretion of HMRC.

If you work in a partnership, it’s also important to note that all partners could be charged if a partnership tax return is not delivered on time. Therefore, you should work out if you wish to proceed with an appeal as a partnership.

Getting professional help

If you are still uncertain of what information you should provide, it’s important that you look to professional accountancy assistance. Filing incorrect tax returns will lead to delays and frustrations that could end up being costly for no good reason.

If you need general assistance with your tax return, consider contacting the HMRC Self-Assessment Helpline. You can do so by calling 0845 900 0444. This can help you get valuable general advice on filing your tax return. If paying your tax return on time is the problem, then you can contact the HMRC Payment Helpline at 0845 366 1204.  For a more personal appraisal of your tax return needs, filed in good time before the deadline, our team at Devonshire Green can steer you in the right direction.

Whatever you do, don’t delay any longer.

Nick Bagga