QUESTION: I have not completed my 2012/13 tax return yet. I understand the deadline for submission of this was January 31 2014. What penalties and interest will I be charged?
ANSWER: The deadline for submitting your 2012/13 tax return was January 31 2014. HM Revenue and Customs will issue you with a late filing penalty even if the return is one day late. The more you delay in submitting the return the greater the penalty you will be charged.
If your return is one day late, you will be issued with an automatic £100 penalty. If your return is still not submitted within three months of the due date you will be charged a daily penalty of £10 per day for a maximum of 90 days which is £900.
If you still have not filed your return six months later you will have to pay a further penalty of 5 per cent of the tax due for that period, or £300 if this is greater than 5 per cent of the tax due. If your return is outstanding 12 months from the date it was due, a further 5 per cent penalty will be charged. These penalties are charged in addition to the tax liability that is outstanding.
If you also have not paid your tax liability further penalties are charged for late payment of tax. Your tax liability for 2012/13 was due to be paid on or before January 31 2014. If you do not pay your tax liability within 30 days of the due date of payment you will be charged a 5 per cent penalty on the tax you owe.
If you still have not paid your liability within six months of the due date, a further 5 per cent penalty will be charged and if your payment is outstanding 12 months from the date it was due, an additional 5 per cent penalty will be charged.
Interest will also be charged daily on your outstanding tax liability from February 1 2014. You should also note that the period of time during which HMRC can open an enquiry into your tax affairs for 2012/13 will also be extended if your tax return is filed late.
To avoid onerous penalties and interest charges we would advise that you seek professional help and have your tax return submitted as soon as possible, together with any tax arrears.
* Paddy Harty (p.harty@ fpmca. com) is senior tax partner at FPM
Chartered Accountants (www.fpmca. com). The advice in this column is specific to the facts surrounding the question posed. Neither the Irish News nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.