QUESITON: I was not able to file my tax return before January 31 as my original records were destroyed in a fire. What are the implications and what should I do now?
ANSWER: The deadline for filing your 2022/23 self-assessment tax return was January 31. You are not alone by missing the deadline and join the estimated 1 million other taxpayers who also missed the deadline this year. You may have already received the automatic £100 penalty, however the initial penalty will be added to if still outstanding by end of April and spiral further if not filed by end of July.
HMRC do offer some leniency with penalties with a ‘reasonable excuse’ that meant a tax return could not be filed on time. These typically include life events such as serious illness or bereavement, and other causes beyond the taxpayer’s control. In all cases full details must be sent to HMRC and it may be that a combination of reasons, rather than a single reason, together may constitute a reasonable excuse.
To get your tax affairs in order, you need to file your tax return as quickly as possible, as penalties escalate the longer the delay. It is important that, even if a reasonable excuse is established, the taxpayer files without unreasonable delay once the excuse has ceased. For example, you have had the opportunity to request replacement records for those destroyed e.g. from your employer, bank, estate agent, etc. which prevented you from filing your return on time in the first place.
HMRC provides a list of common examples of Reasonable Excuses on their website such as:
· your partner or another close relative died shortly before the tax return or payment deadline.
· you had an unexpected stay in hospital that prevented you from dealing with your tax affairs.
· you had a serious or life-threatening illness.
· your computer or software failed just before or while you were preparing your online return.
· service issues with HM Revenue and Customs (HMRC) online services.
· a fire, flood or theft prevented you from completing your tax return.
· postal delays that you couldn’t have predicted.
Any tax liability for 2022/23 was due by January 31. Interest is charged for the entire period the tax is outstanding, and this cannot be mitigated. On top of this, if the liability is not paid by February 28, a late 5% surcharge will be applied. But provided you fill in the relevant section of your Reasonable Excuse claim, HMRC may reduce this to nil also.
You should focus your attentions on completing your tax return before the end of the February and paying and outstanding taxes owed for the 2022/23 year by this time.
- Feargal McCormack (f.mccormack@fpmaab.com) is managing partner at FPM Accountants (www.fpmaab.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.
