In light of the revelation that the government minister Nadhim Zahawi has just received a £1.5m fine for a careless error on his tax return, and as the filing deadline for 2021/22 tax returns is now upon us, we thought it would be a good time to consider:
“ What common situations might lead to a penalty on a tax return”.
These could include
- Simply filing the tax return too late. Generally the tax return deadline is 31st January following the end of the year of assessment. If filed after that date, there is an automatic penalty of £100 and further penalties, including a daily penalty of £10 for each additional day after the return is three months late. There are further penalties due after six months and 12 months
- Poor paperwork meaning that sources of the income are either missed or calculated incorrectly.
- Simply getting the sums wrong
- Misunderstanding the tax rules, for example, claiming for private expenditure, that is not tax deductible.
- Failing to prepare all sources of income or gains. This might happen because there has been a new source of income in the year or the taxpayer simply didn’t realise that it was taxable.
- Forgetting to declare receipt of child benefit if you earn over £50,000.
- Intentionally keeping quiet about sources of income, for example, assuming that overseas income or crypto gains are not traceable by the tax man.
Most people who get caught out by HMRC have made a genuine mistake, but if you would like someone to check, prepare or file your self assessment tax return for you, we’re very happy to help.
Just try not to leave it to the last minute!
Need help with your self assessment tax return?
If you need help with any aspect of your self assessment tax return, please get in touch,