QUESTION: I missed the January 31 self-assessment filing deadline due to illness. What should I do?
ANSWER: Over one million other taxpayers missed the deadline this year. With the freezing of personal tax thresholds and recent increases in savings rates, more people are being dragged into the self-assessment system. You may have already received the automatic £100 penalty; however, the initial penalty will be added to if your return is still outstanding by end of April 2025 and will increase further if not filed by end of July 2025.
On top of the initial £100 penalty, a charge of £10 a day is applied after April up to £900 if a return is still not submitted. A further £300, or up to 5% of the tax bill, is applied after July, and another £300 or 5% after 12 months, depending on which is the larger figure.
HMRC do offer some leniency with penalties if you have a ‘reasonable excuse’ that resulted in your tax return not being filed on time. These typically include life events such as serious illness or bereavement, and other causes beyond the taxpayer’s control.
In all cases full details must be sent to HMRC and it may be that a combination of reasons, rather than a single reason, together may constitute a reasonable excuse.
To get your tax affairs in order, you need to file your tax return as quickly as possible, as penalties escalate the longer the delay. It is important that, even if a reasonable excuse is established, the taxpayer files without unreasonable delay once the excuse has ceased – illness in your case.
HMRC provides a list of common examples of reasonable excuses on their website such as:
- Your partner or another close relative died shortly before the tax return or payment deadline.
- You had an unexpected stay in hospital that prevented you from dealing with your tax affairs.
- You had a serious or life-threatening illness.
- Your computer or software failed just before or while you were preparing your online return.
- Service issues with HM Revenue and Customs (HMRC) online services.
- A fire, flood or theft prevented you from completing your tax return.
- Postal delays that you could not have predicted.
Any tax liability for 2023/24 was due by January 31 as well. Interest is charged for the entire period the tax is outstanding, and this cannot be mitigated.
On top of this, if the liability is not paid by February 28, a late 5% surcharge will be applied. But provided you fill in the relevant section of your Reasonable Excuse claim, HMRC may reduce this to zero also.
You should focus your attentions on completing your tax return before the end of the February and paying and outstanding taxes owed for the 2023/24 year by this time.
- Paddy Harty (paddy.harty@aabgroup.com) is tax partner at AAB Group Accountants Ltd (www.aabgroup.com). The advice in this column is specific to the facts surrounding the question posed. Neither the Irish News nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.