What To Do if You Miss the Tax Return Deadline?

  • July 5, 2023
  • July 6, 2023
  • Shaz Nawaz
  • 8 min read

Each year, like clockwork, over 10 million people are legally bound to do one essential thing in the UK. That is, to submit their self-assessment tax return. Yet, every year, there are a significant number of people who miss the deadline. Their reason may be legitimate or maybe it’s just ignorance on their part. In case you ever end up missing the deadline, you should know what steps to take. This guide is going to explain what to do if you miss the tax return deadline.

A friendly reminder that the amount of late tax returns varies yearly. It can be between the figures of 500,000 to 1.5 million. HMRC will send you both warnings and encouragements to avoid being late. That is why you should know how to tackle this issue.

When is the Deadline to Submit Self-Assessment Tax Return in the UK?

You must report any untaxed income through filing and submitting your personal tax return. Along with which you must pay your due tax. The last date of submission is 31st January of each year.

The report must cover your earnings of the previous tax year. It should state everything from 6th April up till 5th April. As an example, consider this year’s deadline, which was 31st January 2023. For which you were to report an untaxed income from 6th April 2021 to 5th April 2022.

What are the Consequences of Missing the Deadline?

Now, the question is what happens when you miss the deadline for your return? Firstly, you receive a penalty the very next day. HMRC sends you a letter on 1st February. This letter states a notice of penalty assessment. Every day that you delay in paying your tax return, the amount will incur interest. The extent of your delay determines the total penalties and interest. It can lead to a heavy bill coming your way.

In rare cases, failure to submit your tax return can result in prosecution. This is because it is a criminal offence. Mostly, HMRC would prefer to come to an agreement. It is better to recover the tax you owe. If it comes to it, they can take your possessions and sell them at an auction. They can legally do so to recover the tax due. The term for which is distraint. It is essential to understand what to do if you miss the tax return deadline.

Number of Penalties for Missing the Deadline

Penalties for Missing the Deadline

When you unfortunately miss the deadline, two kinds of penalties may head your way. One is for when you fail to submit your tax return before the deadline. The other is when you fail to pay the tax you owe on time. Therefore, it is possible to receive the penalty for delayed submission of tax return even if you owe no tax. Likewise, you can avoid receiving both penalties if you pay any tax liability. You can do so without submitting your tax return. Be warned that both penalties increase with time.

Hence, you should submit your tax return as quickly as possible. It does not matter if you missed the deadline.

If you do not file your self-assessment tax return on time:

  • An automatic fine of £100 comes your way the next day. (1st February).
  • For every day you are late, you will receive an additional £10 penalty up to 90 days.
  • After 6 months delay, you will receive an additional penalty of £300 or 5% of the tax owed. Depending on which is greater.  
  • After 12 months of missing the deadline, a further £300 penalty or 5% of the tax due. Again, it depends on which is greater.

If you do not pay your tax liability by the deadline:

  • After 30 days of missing the deadline, you will pay a penalty of 5% of the amount of tax you owe.
  • If 6 months pass by, you will receive a further penalty of 5% of the tax you must pay.
  • The final additional penalty of 5% of the tax you owe will come your way after 12 months of missing the deadline.

Along with the late payment penalties, you will have to deal with interest. This is applicable on top of the tax due. The calculation of the rate of interest that HMRC will charge is according to legislation. HMRC has the right to charge the base rate as well as a 2.5% interest on overdue tax payments. That is why you should know what to do if you miss the tax return deadline.

Legitimate Reasons for Missing the Deadline

Your plan to submit your tax return on time may fail due to an unfortunate and unforeseeable event. If you miss your deadline and have a reasonable excuse for it, HMRC will accept it.
These legitimate reasons include:

  • In case you had a medical emergency, and you could not file or pay your taxes on time.
  • If a close relative or partner passes away right before the deadline.
  • Under the unfortunate circumstance, that you are suffering from a fatal disease. Or if you face difficulties because of a mental illness or a disability.
  • Any disaster such as a flood or fire. Or even in the case of theft.
  • HMRC’s online services are not working properly due to any issue.

Here is what to do if you miss the tax return deadline for a genuine reason:

Appealing for Penalty

Firstly, you must appeal any penalty that comes your way for missing the deadline. It is necessary to provide the reason for the delay. In case the penalty in question is of late payment of tax, it is best to submit your tax return. HMRC will not consider your appeal otherwise. Thus, you should file it as soon as you can.

Suppose you did not file your tax return because you believed you did not need to. Then, you should reach out to HMRC directly. You can either call them or contact them online. This requires a government gateway ID. If HMRC decides that you are right and filing is not necessary, they will revoke your penalty.

What To Do if You Miss the Tax Return Deadline 2023?

The bad news is that you missed the tax return deadline. The good news is that you can still submit your tax return after the deadline. If you do not want the penalties to pile up, then you must file it as quickly as you can. Do not take stress or feel the pressure of the interest and penalties. This can lead to mistakes in your tax return. Unfortunately, that leads to more penalties.

You have the option to seek guidance from an expert, such as a chartered accountant. They will complete your tax return as accurately as possible, and you can submit it without further delay. This sums up what to do if you miss the tax return deadline.

Steps to Take if You Cannot Afford to Pay Your Tax Return

Along with missing the deadline for filing a tax return, you may face the issue of not fully paying tax. This can be because you cannot afford to do so. Which eventually leads to you missing the deadline for paying the tax you owe. If that happens, you must submit your tax return. That way, you can avoid further penalties.

If you submit the tax return on time, but fail to pay your tax in full, go for the Time to Pay agreement. This is a flexible payment plan, and you can negotiate directly with HMRC. Furthermore, you can get your own payment plan if you file your tax return on time. Make sure that you owe less than £30,000. Also, it is necessary that you are within 60 days of the payment deadline. Your intention should be to pay off your debts within a year or less. Now, you know what to do if you miss the tax return deadline.

How to Submit Your Tax Return on Time

You can prevent yourself from missing the tax deadline by making sure you are registered for self-assessment tax returns. Make sure to register well before the deadline if you must complete a tax return. This is a crucial reminder for those who are completing one for the first time.

Once you register for self-assessment, your Unique Taxpayer Reference (UTR) will come through post. It can take up to 10 working days or more if you are out of country. A UTR is necessary for filing tax return. Do not leave this process for the day before the deadline, because you will miss it. Thus, it is of utmost importance to have enough time for filing your tax return for the first time.

Another way to not miss the tax deadline is to complete your tax return early. A point to remember is that you can submit as early as 6th April. There are benefits to filing your tax return way before 31st January. Lastly, if paying your tax by the deadline is difficult, then you can spread out the cost of your tax bill. You can consider paying it off in instalments. This will make it easier for you to pay the tax you owe in full by the deadline.

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