What Happens If You Miss Tax Return Deadlines?
If you are a business owner, it is crucial to file your tax return on time. But what happens if you miss a deadline? Tax penalties can be costly and put your company in jeopardy. Read this blog post for insight into the consequences of missing tax deadlines and what steps you should take to prevent this.
Missed deadlines
You put your heart and soul into your business, so ensuring you meet tax deadlines is essential to keep your business going. Taxes can be missed for a variety of reasons.
For example, there could be a problem with a business owner’s personal income tax return such as forgetting to file or unable to make payments that then affects a business tax return.
Or you could be missing information which prevents you from filing on time. If you miss deadlines and do not file taxes in a timely manner, there are serious consequences that can affect your business’s future well-being. Penalties range depending on the type of tax return and how late you are in filing.
Self-assessment penalties
For those submitting self-assessments to HMRC, you will get a penalty of £100 if you miss your tax return up to 3 months late. Any longer and you will pay more as well as be charged interest on late payments.
It’s important to also note that all partners can be charged a penalty if a partnership tax return is late.
Self-assessment tax return deadlines for 2020 to 2021 tax year are 31 October 2021 for paper returns and 31 January 2022 for online tax returns.
Corporation or late filing penalties
If your business is a corporation, you will be charged £100 for 1 day over the deadline. Then another £100 at 3 months.
When it hits 6 months overdue, HMRC estimates your Corporation Tax bill and will add further penalty charges of 10% for any unpaid tax. An additional 10% is charged on any unpaid tax at 12 months.
If tax returns are late 3 consecutive times in a row, the penalties increase from £100 to £500 each.
The corporation tax return deadline is 12 months after the end of the accounting period it covers. The Corporation Tax deadline for payment is 9 months and one day after the end of the accounting period unless your company is regarded as large in which case instalment arrangements are put in place. A large company is one that has profits of £1.5 million although this limit is reduced by the number of active group companies.
Seek expert help for tax returns
The last thing your business needs is a hefty fine for missing an important deadline!
To avoid missed deadlines and serious consequences it’s always better to be proactive than sorry.
If you are having trouble meeting tax deadlines, it is important to speak with HMRC and seek professional help from an accountant with tax expertise to help you avoid late fees and penalties.
As a business owner, you know that running your company is time-consuming. Between the day-to-day operations and dealing with employees, it can be hard to find time for all of the paperwork. This includes tax returns! If you neglect your tax obligations, there are consequences. And if you miss deadlines on filing certain types of tax returns, there could be some major penalties in store for you.