Despite the massive annual publicity drive by H M Revenue & Customs (HMRC) to remind people to meet the self-assessment filing deadline of 31 January, many still miss it. Last year 1 million out of the 9.8 million people required to file a tax return were late, many receiving a £100 penalty.

Three second-chances – if you are quick!

If you think you are narrowly going to miss the deadline, you have three last-minute chances to avoid the penalty:

1. HMRC makes a great effort to allow taxpayers to drop off their income tax returns at HMRC offices. However, beware that the number of offices accepting such returns has been reduced and the centre you might have used last year may not be open for this year. Also beware you can no longer get a receipt for your return. Some commentators have even suggested using a mobile phone camera to record proof of delivery! Quite how you do this is another matter – perhaps a nice digital photograph of the friendly HMRC security guard would be good evidence!
2. Following a case brought by a taxpayer, HMRC has confirmed that they cannot tell the difference between returns received between 5.30pm to midnight on 31 January, and those received in the post the following day. So, if you can get your tax return to the HMRC on 1 February 2006 you will not receive a penalty.
3. On-line filing has become a preferred choice of delivery for many taxpayers and in previous years the HMRC website has become rather overloaded at the last minute, thus taxpayers have been unable to file their return in time. At Barnes Roffe LLP we have encouraged taxpayers to register for on-line filing via our tax return software, which automatically enters the tax return information into the HMRC database via a different route. Also, see Topical Tips 65 for details of the shortcomings of the HMRC on-line filing service. The method used by us does not suffer from this simplification for foreign dividends.

A cap on the fine!

Another small bit of good news is a little known rule is that the penalty for late filing is £100, but it cannot exceed the tax liability for the year, or the amount outstanding at the filing date. So, if you are due a refund, due to pay no tax or can make an accurate estimated payment (or even a small overpayment) by 31 January 2006 then you have a further breathing space in which to file your return. See this link for details.

Barnes Roffe Topical Tips:

• Consider making the correct payment (or even a small overpayment which will be refunded in due course) by 31 January 2006 to stop penalties arising. (See the pay-slip sent to you by HMRC for payment methods.)
• Ask if we can electronically file your return.
• Consider filing your return via the HMRC website (if we cannot file on your behalf).
• Try to get the return to your local HMRC office by 1 February 2006