Missing a tax return deadline or failing to pay on time can quickly become costly, and a lot of people underestimate how strict HMRC can be – the penalties start small, but they build up, and before long what seemed like a minor delay can turn into a significant bill you weren’t expecting.
Penalties for Late Tax Returns
If a tax return isn’t filed by the deadline, HMRC usually issues an automatic penalty which starts with a fixed fine on the first day it’s late, and then daily penalties can be added if it continues to be late. After a few months, the penalties increase further. It’s not designed to catch people out, but it does add up quickly.
Penalties for Late Payments
Failing to pay the tax owed by the deadline also carries penalties. There’s often an initial percentage added soon after the due date, and that rate increases over time, plus interest is charged on late payments, which means the cost grows the longer you wait.
How to Avoid Problems
Professional support can make a big difference, especially if your tax situation is complicated. A good team of Stroud accountants can help make sure your returns are submitted on time and that payments are planned properly. And if you do find yourself facing a penalty, contacting Stroud accountants early can help you understand your options and possibly negotiate with HMRC.
Final Thoughts
Penalties for late tax returns and payments can mount quickly, but with the right support and planning, they’re entirely avoidable.