Missed the bus on the deadline to pay your Tax?
January is a hectic month for Small and Medium enterprises (SMEs). Where the tax deadline is looming for your business even the most prepared can find it difficult to gather the funds to make the payment in time for the deadline.
If you miss the deadline to make the payment there is likely to be a penalty. HMRC can though waive the penalty should you have a “reasonable” reason for missing your payment. HMRC states on their website that a reasonable reason for missing the deadline is something unexpected or outside of your control which stopped you meeting your tax obligation.
This is not an exhaustive list and the HMRC is clear that each case is looked at uniquely, however examples include; the recent death of a partner, an unexpected stay in hospital or computer failures. It is always best to file your return in plenty of time.
Missing the 31 January deadline will usually result in tax penalties and fines and the longer you delay payment the more you’re likely to have to pay. Below we have included a list of penalties you could be subjected to;
Payment 1 day late- an automatic £100 fine;
Payment 3 months late- £10 for each following day up to a 90 day maximum of £900. NB this is in addition to the £100 penalty for being 1 day late;
Payment 6 months late- £300 or 5% of the tax due whichever figure is higher and this will be on top of the above mentioned fees;
Payment 12 months later- A further £300 fine or 5% of the tax due whichever is higher.
Top tip: Ensure you have a proper debt management processes in place so that you are never scrambling for the cash to pay your tax returns.