Missing your tax deadline could cost thousands

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The last thing you want to think about at the moment is your self-assessment tax return. All the hassle and stress of Christmas is only just over, and who has the money to pay a huge tax bill at the beginning of the year? But if you have to fill out a form, then you don't have a choice. If you don't get your form and your payment in by the end of the month, you'll face a hefty fine.

And if you don't submit it quickly after that, the fines will soon reach astronomical levels.

Fines

If you miss the deadline, even by a few seconds after midnight, you'll get an immediate £100 fine. You'll have to pay this even if you don't actually have any outstanding tax - because you still have to get the form in on time.

There is a huge swathe of people who will miss this deadline. Last year 7% of all those who needed to self-assess failed to do so by the deadline. Many of those who hit the deadline did so by the skin of their teeth. The busiest day for filing returns was 31 January - when 578,000 were submitted.

If you get it in by the end of April, then this is all you'll have to pay, but at this point the fines start to get particularly punishing. From midnight on 30 April you'll be charged £10 a day - which will continue to be added to your bill for the next 90 days - until you hit £900.

After that, the next slice of pain comes when you're six months late, when you'll either be charged £300 or 5% of all the tax you owe (whichever is the larger amount). If you leave it another six months after that you'll have to pay another £300 or 5%.

If HMRC thinks you are being deliberately difficult, or that there's something untoward going on, then they will hit you with an even bigger fine. This is up to them, but it can be up to 100% of the tax that's due.

No excuses

There are a limited number of excuses that HMRC will accept, and they will waive the fines if you can prove you have a genuine reason for not being able to complete a return on time. However, these reasons are few and far between. Last week they issued a series of flimsy excuses that they rejected last year, including the sad death of a pet goldfish, a bad back which kept the taxpayer downstairs and away from his filing cabinet, and one trader who tried to argue that he couldn't get all the documents he needed because his wife wouldn't give him his mail.

And it's worth bearing in mind that if this is the first time you are completing a return online, there's an extra step to factor into your calculations. You'll need an activation code for the website, which comes in the post, so you'll need to log on at least a few days in advance to order to get your code, or you'll run into trouble even if you make every effort to get your paperwork in order by the 31st.