QUESTION: I normally file my tax return on paper in October, but due to ill health I may not be able to this year. Will I incur any fines?
ANSWER: In the UK, the annual tax return is a crucial obligation for individuals and businesses to report their income, expenses, and tax liability. While many opt for the convenience of online filing, some still choose to file their tax returns on paper. If you're one of them, it's essential to understand the process, deadlines, and potential consequences.
Filing a tax return on paper in the UK is still a valid option, but it involves a more traditional and time-consuming approach compared to online filing. Here's a step-by-step guide:
· Request the paper forms: First, you need to request the necessary tax return forms from HM Revenue and Customs (HMRC). These forms typically become available in April each year.
· Complete the forms: Fill out the tax return forms accurately, providing details of your income, expenses, and any relevant deductions or credits. Be thorough and double-check your calculations.
· Gather supporting documents: Retain somewhere safe in the event of HMRC requesting further information (business owners must retain records for at least five years and non-business owners at least two years from January 31 following end of relevant tax year).
· Sign and date: Sign and date your completed tax return forms. Failure to do so may result in delays or penalties.
· Submit by October 31: The deadline for filing paper tax returns is October 31 following the end of the tax year (April 5). You must ensure that your completed forms reach HMRC by this date.
· With a paper return, HMRC will process and calculate your tax liability for you. Be sure to check any HMRC calculations for accuracy and contact them should you disagree with any details.
Filing your paper tax return after the October 31 deadline can have consequences. Here are your options if you miss the deadline:
· File online: If you miss the paper filing deadline, you can still file your tax return online. The online filing deadline is usually January 31. However, penalties and interest may apply for late filing.
· Pay penalties: HMRC imposes penalties for late filing. The penalties depend on how late your return is and whether you owe any tax. The longer you delay, the higher the penalties can be.
Late filing of your tax return can result in financial penalties and interest charges. Here's a breakdown of the penalties:
· Up to three months late: £100 penalty, even if you don't owe any tax.
· 3-6 months late: An additional £10 per day penalty, up to a maximum of £900.
· 6-12 months late: An additional £300 penalty or 5 per cent of the tax due (whichever is higher).
· Over 12 months late: Another £300 penalty or 5 per cent of the tax due (whichever is higher).
Filing your UK tax return on paper by the October deadline is a traditional but valid option. However, missing the January 31 online deadline can lead to penalties and interest charges. It's essential to be aware of the consequences, explore your options, and consider online filing for a more convenient and timely process. If you encounter difficulties or have valid reasons for a late filing, don't hesitate to exercise your right to appeal.
:: Shane Martin (s.martin@fpmaab.com) is tax director at FPM Accountants Ltd (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
