Did you miss the Self Assessment deadline?

07/02/2012, by Low Incomes Tax Reform Group, Tax Articles - General

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If you missed the Self Assessment tax return deadline and can show that you should not have been in the SA regime, you may be able to avoid any penalties.

Introduction

LITRG look at HMRC’s guidance as to their policy on Self Assessment (SA) penalties.

HMRC’s approach

The first point they make is that they want to treat people fairly. On that basis, now the 31 January deadline has passed and penalties have begun to apply, HMRC indicate they will use their utmost discretion to ensure that they are even-handed and treat people with sensitivity. HMRC also say they propose to be as supportive and flexible as legislation permits.

Some specific examples that HMRC provide are that:

They will be sympathetic in exercising discretion where you are prevented by circumstances outside your control from filing on time. In such cases, they will cancel the penalty, but you must still file as soon as possible. Clearly HMRC wish to be more flexible in their interpretation of the law on reasonable excuse than they sometimes have been in the past.
They will take you out of Self Assessment if you should not be in the system and you contact them. If you can demonstrate that you do not need to be in Self Assessment, you will no longer need to submit a return and HMRC will cancel any penalty you have already incurred.

People who should not be in the SA regime

HMRC tell us they are aware there are people in Self Assessment who should not be but that until you make contact either by phone or by submitting a return, it is not possible for them to determine whether there is, in fact, any need for you to complete a form.

We also understand there is going to be some further publicity on this issue and in addition, you may receive a direct letter inviting you to call HMRC to give them some basic information to help confirm whether if should be in Self Assessment. If it turns out you should not, HMRC say they will take you out of the system and cancel any penalty incurred.

Anyone who thinks they should not be in Self Assessment can call HMRC on 0845 900 0444. Full contact details including a postal address can be found on the HMRC website.

People who generally are in the SA system

You generally need to submit a Self-Assessment return if:

You are self-employed (including being a member of a partnership)
You are a company director, minister of religion, Lloyd's name or member
You earn income above a certain level from savings, investment or property
You're 65 or over and receive a reduced age-related allowance [However, where your affairs are straightforward – for example, your only income is from UK pensions paid under the PAYE system, or you only have one other small source of income such as bank interest – you may ask HMRC if they will take you out of Self Assessment.]
You have any foreign income that is liable to UK tax
Your annual income is £100,000 or more
You need to claim certain expenses or reliefs
You owe tax and HMRC can't collect it through your tax code, or you prefer to pay direct
You have Capital Gains Tax to pay
You've lived or worked abroad or aren't domiciled in the UK
You're a trustee.

The full list of people who need to file can be found on the LITRG website.

About The Author

The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation to give a voice to those who cannot afford to pay for tax advice. LITRG comprises tax specialists from professional practice and the voluntary sector, from publishing and from HM Revenue & Customs, together with people from a welfare benefits and social policy background. Visit www.litrg.org.uk for further information.

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