Self-employed warned over late tax returns

The nation's entrepreneurs are being called to complete their self-assessment tax returns in time, if they want to avoid hefty fines for late filing.

The warning comes in a report from leading accountants PricewaterhouseCoopers, in light of the 31 January deadline for small businesses.

Last year, almost 890,000 tax returns missed the end-of-month deadline - an increase from the 875,000 late filers in 2003.

This year, the Inland Revenue said it expects to see a similar number of late returns and unpaid tax, meaning potential fines for nearly one million self-employed individuals.

Late filers, including those with complicated tax affairs or high earnings, will face the fixed charge of £100 at interest of 5.75 per cent.

Any people with unpaid sums or unreturned self-assessment forms in July will face further charges of £100, with yearly offenders handed down £60 fines.

Such a policy of additional fines is in line with a forthcoming review on tax by the National Audit Office, which is expected to recommend the introduction of daily penalties.

The NAO said it is considering a "range of initiatives" to encourage correct and timely filing of tax returns, such as fixed charging and extra delay charges.

This would help the Revenue meet its target of accurate tax returns with the intention of reducing the 30 per cent of tax forms returned inaccurately.

Meanwhile, the Revenue said self-assessment filers should leave at least a week if they want to file their tax return online.

John Whiting, senior partner of Price WaterHouseCoopers, advises people invest in good preparation before they start filling in their tax return.

"Make sure you get your return in by 31 January. Pay your tax bills on time – watch out for payments on account demands and make sure you understand them if you get them (due 31 January and 31 July); final settlement is due 31 January and interest runs on late payments.

"Don't adopt the ostrich approach with Inland Revenue correspondence - it won't go away."


11th January 2005

Related News

Latest News