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Taxpayers Pay £10 a Day In Self Assessment Penalty

Published by Prerana
Published Date: April 26, 2024

Many taxpayers missed the deadline for submitting their Self Assessment Tax Returns on 31 January. As a result, HMRC has introduced a new rule which imposes an additional late filing penalty of £10 per day, up to a maximum of £900. It is important to note that the consequences for late submission are more severe than ever, with significant penalties awaiting those who miss the cut-off.

What Are the Consequences of Missing the Deadline?

Taxpayers who failed to file their Self Assessment Tax Return for the Tax Year 2022/23 by 31 January will be charged an additional £10 per day penalty fee starting from 1 May. If you have missed the deadline, it is recommended that you complete your tax return and pay any liabilities before 1 May to avoid incurring this extra charge.

Apart from the daily penalty fee, those who missed the deadline will also be subject to a £100 late filing penalty for failing to file their Self Assessment Tax Return online by 31 January. HM Revenue and Customs (HMRC) is expected to receive a total of £110 million in revenue from approximately 1.1 million taxpayers who failed to meet the deadline.

HMRC issues a £10 per day Self Assessment Penalty

Also, the maximum penalty of £900 can quickly accumulate at a rate of £10 per day. Late payment of taxes results in extra penalties - 5% of the tax owed each at 30 days, six months, and 12 months, along with an interest rate of 7.75% on the unpaid tax. This interest rate is the highest it has been in over 20 years.

How Can Taxpayers Navigate the Complexities of Tax Filing?

The first thing taxpayers must ensure while filing tax returns is the timely payment of any tax-liable income. In addition, taxpayers who are struggling to pay their taxes for personal reasons can use the HMRC Self Assessment Helpline. Although the helpline was closed between April and September, been HMRC decided to reopen it after listening to public backlash.

Apart from this, taxpayers can use the professional advice provided by an accounting and taxation firm for their Self Assessment Tax Return.

Conclusion

The recent imposition of a £10 per day penalty for late filing of Self Assessment Tax Return highlights the importance of timely compliance with HMRC’s regulations. With the deadline approaching soon, taxpayers must prioritise completing and submitting their tax returns to avoid adding up significant financial penalties. Ultimately, by being proactive and fulfilling their tax obligations, taxpayers can prevent unnecessary penalties and maintain their financial stability.

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