The 31 January tax return deadline - how to avoid fines

The taxman’s publicity machine has made sure that we are all painfully aware of the 31 January deadline for filing our tax returns.

Quite correctly, he never fails to mention that penalties may be charged if you are late. But he doesn’t tell you the full story. Firstly, here are the rules for filing tax returns and the penalties for being late:

• Returns must be filed online by 31 January
• The balance of any tax due for 2008/09 must be paid by 31 January 2010. In addition, a payment on account of tax for 2009/10 may be due by 31 January 2010
• A maximum £100 penalty will be charged for late returns. However, if the tax due is less than this, the penalty is capped at the amount of tax outstanding.

Further details are available on the Revenue website.

BUT here are some ways that you can avoid having to pay fines:

1. Pay the tax due, or an estimate, before 31 January. Even if the tax return itself is late, there will be no fine if the tax is paid by the 31st.
2. Submit a tax return with estimated figures on it. You can resubmit at a later date with the right amounts and pay no fine.
3. Come up with a ‘reasonable excuse’ for being late; e.g. something out of your control that has meant you could not get the tax return in on time, like your house (containing the relevant papers) burning down, your computer hard disc failing. Whatever you say must, of course, be true!

If you would like to discuss any of the above, or to find out more, please get in touch with Susan Kemish on 0118 9235811 or your usual contact at K&H.