Taxman gets tough with self-assessment 'offenders'

Business advisors, PricewaterhouseCoopers (PwC) have warned that anyone who misses the January 31 tax deadline for self-assessment forms could face potentially huge fines from the Inland Revenue.

Last year, nearly one in ten of the UK’s nine million self-assessment taxpayers missed the deadline and were faced with a basic £100 penalty, at least.

However, PwC have warned that persistent offenders and those with a poor payment record will face hefty interest charges from the Inland Revenue to the tune of £60-a-day fines.

Self-employed, higher rate taxpayer and those who derive their income from multiple sources, must return their completed self-assessment forms by January 31.

Bronach Doyle, tax partner with PwC in Belfast, said: “Too many self-assessment taxpayers are habitually late and the Revenue has the power to add a fine of £60 a day on top of the £100 automatic penalty. In addition, tardy taxpayers will be charged interest at a whopping 6.5 per cent on any tax owed, plus another 5 per cent surcharge if the tax remains unpaid at the end of February.”

“Those who have not even started filling in the forms need to get moving. One option may be to file online, but anyone thinking about this option should remember that it takes a couple of days after registration before you can use the online service.”

However, the online service is best suited to those with relatively simple tax affairs. If you need to declare capital gains or losses, you need to use the traditional paper forms and the same goes for anyone who has rental property, is engaged in a partnership or is self-employed.

PwC also reminded self-employed persons that they should remember what exactly they were supposed to pay by the January 31 deadline.

“Many self-employed make the mistake of assuming that they only have to pay the balance of any tax still owing from the previous tax year," said Ms Doyle. "Under self-assessment, taxpayers also have to make the first of two payments on account for the current year, with the second payment falling due by July 31. Taxpayers should take this deadline – and the penalties – very seriously."

With almost 900,000 taxpayers missing the deadline every year, she said that the Inland Revenue was "losing patience with persistent offenders".

(KMcA)