Date posted: 13th Feb 2025
We understand that an estimated 1.1 million taxpayers did not file their 2023/24 tax returns by the due date of 31 January 2025.
Those individuals, trusts and partnerships that failed to file their tax returns on time, will receive a £100 late filing penalty (partners will each receive a £100 late filing penalty for the partnership) which could lead to HMRC receiving a windfall of £110m!
If the failure to complete a tax return continues past 1 May 2025, further penalties will begin to accrue from 1 May 2025, when a daily penalty is imposed for 90 days until around the end of July. The charge being £10 per day for every day the failure to submit a tax return continues. Then further penalties are imposed thereafter which are the higher of 5% of the tax due or £300.
Failing to complete your tax return, will be quite costly in respect of penalties, so the sooner this is corrected, the better.
Of course, there may be reasons why the tax return was not completed on time. If these are deemed to be a reasonable excuse by HMRC (upon appeal) then the penalties may be waived by HMRC. However, HMRC take a strict view of what will count as a reasonable excuse and “the dog ate the post” or “my mother in law cursed me” are unlikely to succeed but if you were ill or there was a death in the family, then HMRC will likely show some sympathy.
Indeed, due to the reform of how sole traders and partnerships were taxed in 2023/24, there may be delays caused by HMRC if they did not provide certain information to the taxpayer by 31 January 2025. HMRC have stated that they will waive the £100 penalty as long as the tax return is received by 28 February 2025.
However, taxpayers need to be aware that late payment interest will still be charged by HMRC from the due date of 31 January 2025 and they will also impose a 5% late payment penalty where the tax is not paid within 30 days of the due date.
If you need any assistance with tax returns or a penalty appeal, please get in touch.
