Tag Archive | "self-assessment tax return"

“Interesting” Excuses for Late Tax Returns

It’s that time of the year again for contractors…doing your tax returns online, so make sure you get everything done by the 31st of January.

If you don’t want to do everything yourself or you are struggling to get things done, then do yourself a favour and hire a contractor accountant. Worth every penny if you ask me.

So what happens if you don’t get your tax return in on time? Well, HMRC give you a fine, and then if you still don’t get it done then you get even more fines.

Now, if you miss the deadline and are fined then you have the opportunity to appeal their decision, and as we’ve recently found out some of the excuses are quite…interesting.

It’s worth noting that all of the excuses you are about to read were unsuccessful, which means the fines stood and the people had to pay them and get in their tax returns as well.

However, if you do have a genuine excuse that is “reasonable” then HMRC will listen to you, even though there is no guarantee you will be successful. My advice is to just get your tax return in by the 31st and save yourself a lot of hassle.

Some of the excuses:

One self-employed person claimed that his yacht caught fire, which meant he could no longer send in his tax return. As you can imagine, HMRC were not impressed.

Another person gave the excuse that their dog ate the tax return, leaving them unable to do anything about it. Something tells me they probably used this one at school as well.

How about the woman who claimed she couldn’t complete her tax return because her husband left…with her accountant. She went on to add that she is currently trying to find a new accountant.

Some other excuses include:

My child scribbled over the tax return which means I couldn’t send it in because you wouldn’t be able to read it.

A friend borrowed my tax return and never returned it.

My husband told me it had to be in by the 31st March.

I don’t have the internet.

The postman doesn’t deliver to my house.

All possibly genuine excuses that could get you out of having to pay the fine, but it seems HMRC were having none of it.

My advice? Do everything you can to get that tax return in, and do it as soon as possible. Too many people wait right until the last minute, and then are rushing around trying to get everything done.

Don’t be one of these people. Instead, get it sorted today, then you can sit back and relax, and won’t need to come up with any excuses no matter how good they are.

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Government offers new guidance to the self-employed

The Government in its infinite wisdom has decided to offer new guidance for the self-employed like freelancers and contractors to help set things straight.

Self-employment as a way to make a living has become so popular over the last few years that more Brits are working for themselves than ever before. However, even in the face of that there are plenty of individuals who are dying to make the jump to working for themselves – but sometimes it seems so complicated a task that it’s simply too daunting to pull the trigger; believe it or not the Government has come through in order to let people know that striking out as a sole trader or contractor doesn’t mean that they have to necessarily go it alone.

In fact, with some of the biggest problems self-employed Brits face in the realm of navigating things like self-assessment tax returns and National Insurance, Her Majesty’s Revenue & Customs has stepped into the breach to provide some comfort in the form of a shedload of free online courses the self-employed can take to provide the knowledge they need; it’s likely the next best thing to going out and becoming a chartered accountant in your own right, if you ask me.

The courses HMRC is offering focus on a number of topics and start with a slew of business emails designed to make it a snap for those thinking of jumping into entrepreneurship to build the infrastructure for their new endeavours. The free service, according to the taxman, should help professionals gain a better understanding in order to set up their own business properly.

If that wasn’t enough, HMRC says it will also host several one hour long webinars that will cover important topics. Attendees can ask questions during the presentations; participation requires showing up at your computer just five minutes in advance to log in, but for those who prefer just to watch and listen you need only go to YouTube to watch the video afterwards.

Finally, the tax authority is providing more materials to nascent self-employed Brits that clarifies what their tax requirements will be in the form of more expressive guidance. This last part is likely to be quite helpful for any number of contractors and freelance workers.

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Public accounts committee takes HMRC to the woodshed

Parliament’s public accounts committee has taken HM Revenue & Customs to the woodshed for its approach to an internal IT system nightmare in the offing.

The committee absolutely laced into HMRC, calling its approach to an enormously challenging IT issue complacent, even though it could cause absolute havoc for taxpayers and government officials alike. The problem stems from a maintenance contract for its hardware and software that expires in 2017 – and with the importance of what the tax authority deals with on a day-to-day basis, the fact that HMRC has yet to line up an IT contractor to replace outgoing contractor Aspire has gotten the parliament finance watchdog’s hackles up.

The committee really let the taxman have it, remarking that HMRC not only lacked any sort of contingency plan in the event of any serious isues but that it didn’t even have the skills needed to negotiate new IT deals that wouldn’t have the government office raked over the coals or taken for a ride. These issues were raised just ahead of the 650,000 emails HMRC is preparing to send out to taxpayers who have yet to submit their self-assessment tax returns. With 31 January quite literally just around the corner, the tax authority is of course expecting to be inundated with last-minute assessments, and that could put a strain on IT systems in ways that I’m sure has the committee up at night tossing and turning.

Look, I’m not about to come out and defend HMRC for its ability – or lack thereof – to get things done or to negotiate contracts with IT professionals. I’m not going to jump all over the committee either, but I am going to say that for a government entity that’s responsible for collecting and keeping track of billions of pounds in tax revenue it seems like having a strong enough IT backbone to keep records sorted and make sure data is flowing in the right directions is something of a bloody priority, don’t you think?

Honestly the taxman isn’t helping itself out any, as it’s already suffering from a poor reputation either from real or perceived slights. Taxpayers losing confidence in HMRC is probably the last thing that needs to happen, especially if the tax authority is trying to encourage more people to pay what they owe and not less.

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Get in line now: HMRC says wait times are rising

Her Majesty & Customs recently revealed that wait times are increasing precipitously when it comes to helpline answers, with times doubling year-on-year.

Unless you’ve been living under a rock, it’s a safe bet that you know the self-assessment tax return deadline is looming. January 31 is looming ever closer, and that means plenty of Brits – especially contractors and other self-employed individuals – will be burning the midnight oil to get their financial details sorted in time to submit their returns. That also means that there’s going to be some hellishly long queues for anyone ringing up the tax authority helplines – and HMRC says the wait times you’re going to encounter are likely to be worse than they were last year.

According to the taxman itself, wait times in September of this year were twice what they were 12 months prior to that. Anyone calling up a call centre was on line an average of nearly 11 minutes. Now I know that doesn’t sound really all that long but when you’re sitting there with your financial information spread across your desk, eager and nervous about getting something cleared up so you can finally submit your return, 11 minutes feels like bloody hours.

HMRC said it was shifting around 1,500 additional staff to man the phone lines this month in order to provide a bit of relief for anyone with a self-assessment question, you know as well as I do that there’s no guarantee that this will help or not. With the tax authority fielding something like 70 million phone calls per year, it sounds to me that HMRC needs a fair bit more than just 1,500 new phone centre staff.

In other words, you should make yourself comfortable if you’re planning on ringing up the taxman to answer a question or two ahead of you submitting your self-assessment return. Perhaps next year you can begin the whole process a bit sooner so you’re not caught in the press of people who all waited to the last minute like you did. I know life is hard and things get in the way but you’re never going to get those 11 minutes of your life back; wouldn’t you rather do something else during that time like spending it with your family?

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Christmas – the season for self assessment tax returns?

Of all the things you’d never expect, it seems that Christmas certainly is the season for giving… your self assessment tax return to HM Revenue & Customs.

Believe it or not, but HMRC says that Christmas Day saw an impressive 1,773 tax returns sent in. Even more impressive is that this is higher than 2013’s Christmas Day figures, where the taxman received 1,566 self assessment tax returns.

Apparently, the lion’s share of the activity on Christmas Day was between noon and 1:00 pm. Apparently around 148 Brits sent in their tax returns electronically, perhaps ducking out from familial obligations to get some so-called “fresh air.” Normally I’d be sneaking a fag in the back garden at a time like that, but some people just really enjoy taking care of their tax obligations! I suppose I shouldn’t be taking the piss out of them. It’s incredibly important to get your self assessment in early enough so that if there’s any issues with it HMRC can let you know well before they start fining you within an inch of your life.

Of course, Christmas Day has nothing in comparison to both the day before and the day after. HMRC said that it received more than 17,000 tax returns on December 24, an increase of about four per cent, and on Boxing Day there were more than 4,800 self assessments submitted – a jump of around seven per cent. All in all, there were more than 24,200 online returns submitted to the tax authority this holiday season, which beat the pants off 2013’s haul by more than a thousand returns.

So well done you if you got your self-assessment in on Christmas, or even earlier. You probably know better than anyone that 31 January is creeping ever closer, especially now that the New Year has come, so you’d better not delay if you’re dragging your feet. Yes, I know, you all lead very busy lives and end up leaving things to the last minute – honestly I don’t want to hear it. Sort your life out and get your damned self assessment in before the deadline… unless you actually enjoy paying ridiculous fines. If that’s the case, please go ahead. Whatever tickles your fancy, mate.


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HMRC reminds contractors about tax returns

Contractors beware: the self assessment tax return deadline for the 2013/14 year is closing fast, and the taxman can’t wait to start charging fines for it.

If there’s one thing that Her Majesty’s Revenue & Customs likes it’s wringing as much cash as it possibly can from taxpayers. It especially likes when self-employed Brits like freelancers and contractors drag their heels when it comes to sending in their self assessment returns, as it means that it gets to charge these tardy individuals an extra £100 for their sins.

The deadline this year is 31 October, and that means anyone missing the deadline is in for a nasty trick just in time for Halloween. You’ll be slapped with a £100 fixed penalty for missing the final date, and it doesn’t matter if you don’t even owe any tax – you’ll still have to pay the tax authority. Likewise even if you get your payment in for the right amount you’ll still be on the hook for that extra £100, so do yourself a favour and don’t dawdle – unless you enjoy paying through the nose, that is.

Think that a paltry £100 isn’t much to worry about and that you’ll just let it slide for a few months? Bad idea – you’ll see even larger penalties at the three month, six month, and 12 month thresholds. Better to just get it in so you don’t have to worry about it.

Of course HMRC would much prefer you to fill your tax return in online. There are many perks for doing so, chief amongst them being given shedloads of extra time. The deadline for online filing is 31 January 2015. Not only that but those choosing to file their SA online will see their return processed more swiftly and their tax calculated automatically. Still, not everyone is prepared to live and breathe in the 21st century which is why the tax authority still accepts paper SA returns. It’s doing you a favour by not phasing them out completely, so you should get your act together and comply with the deadlines already.

For what it’s worth, I know that nobody enjoys doing their taxes. Contractors and freelancers especially have had a hard time filing SA returns, and many have decided that the stress of figuring out an SA return themselves is too much to bear; instead these individuals reach out to a qualified contractor accountant to do the heavy lifting for them. It may cost them a few quid but the alternative – missing the deadline, or calculating your taxes incorrectly – is an even bigger pain, so using a good contractor accountant can easily pay for itself quite quickly.

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Record number of self-assessments filed on time this year

Wonder of wonders – it looks like a massive number of self-employed contractors and freelancers managed to get their self-assessment forms in on time this year.

At least that’s what Her Majesty’s Revenue and Customs says. In fact, the taxman remarked that the number of self-assessment forms filed by the 31 January deadline broke all its records. In excess of 10 million returns made it in under the wire this year, handily defeating January 2013’s record by around 400,000 assessments.

That’s not all, though – contractors and freelancers flocked to online submission in a major way, with the internet facilitating 8.48 million returns – a good 500,000 more than last year. Nearly 85 per cent of all returns were done electronically this past January, meaning that HMRC will have much less of a devil of a time mucking about with all that bloody paperwork.

All in all, nearly 94 per cent of those required to file a 2012-2013 tax return last January did so, which is another major coup for the taxman and once more setting a new record. It looks like the whole focus HMRC had on pushing self-assessment awareness this past year seems to have absolutely paid off, judging by these figures!

Don’t worry, though – there’s still plenty of Brits waiting to the very last minute. More than half a million forms were filed on the deadline day. Still getting it done the day of is loads better than being slapped with a £100 penalty, isn’t it?

All in all, this bodes well for tax compliance, if you ask me. For what it’s worth most Brits can’t be arsed to get their financial details in order on time, especially freelancers and contractors who often have to end up using contractor accountants to manage their finances for them. At any rate, whether you did your self-assessment return yourself or you had the help of a skilled and talented accountant to help you through the process, well done you if you got it done before the deadline. For everyone who’s still dragging their feet – I hope you enjoy shelling out for all those ridiculously high-priced penalty fees! You know they keep going up over time, right?

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Fully paperless Self Assessment returns loom in future

The taxman has taken the next step in achieving its ultimate goal of running before it can walk by making it impossible to submit a paper self-assessment.

Everyone loves to have a go at Her Majesty’s Revenue and Customs. Truth be told, I’m not innocent when it comes to running down the tax authority for its hare-brained schemes, but the thing is that HMRC makes itself a target as a result of its massively stupid behaviour. The newest example of this idiocy, the push towards completely paperless self assessment tax returns is getting closer to fruition thanks to a newly launched consultation proposal.

Listen, I know HMRC is keen to save as many little pennies as it can, but I don’t know if eliminating paper waste is really going to make much of a difference. Yes, without the need to send countless little bits of correspondence through the post it will be faster and more efficient, I’ll give you that – but at what price? Not every Brit is as technologically adept at even simple things like checking their e-mail. Not only that, but can’t electronic communications be intercepted? It’s hard to tamper with a letter sent by post, but something tells me that the security of the financial details of the average person submitting self-assessment return might be less secure whilst being transmitted over the world’s most diverse electronic data transfer network.

I can only hope that this push towards digital, all-online and paperless tax returns isn’t going to make it impossible to submit a tax return the old-fashioned way, if nothing else but to ensure that Brits without reliable internet access can still take care of their tax business. All too often do small minorities of the British taxpaying population fall through the cracks between the way it’s always been and new, supposedly more efficient and time-saving methods of doing things. There’s still shedloads of people around paying taxes that were born far, far before the idea of the internet was even a twinkle in the eye of the programmers and engineers that brought it to life, and to ignore these people in the name of ‘progress’ is the height of arrogance, if you ask me. So let’s just cross our fingers and hope that the taxman doesn’t end up shooting itself in the foot in its zeal to join the 21st century.

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New online accounts system could save contractors’ skins

If tax returns are the absolute bane of your existence as a contractor, here’s some welcome news: the Government may be coming to your rescue for a change!

Her Majesty’s Revenue & Customs is planning to launch a new ‘online accounts’ system, which will provide a route for taxpayers to provide the taxman with just the information it needs without the requirement of making a full tax return. The new system will have some £200 million invested in it with the hopes that it will recover those costs – and generate much more income for HMRC to boot – and hopes are high that it will actually help people get their self-assessment tax returns in without as much problem.

Of course, this new system is most likely going to be taxed to its utmost thanks to new tax law changes. The child benefits scaleback alone could see an additional 500,000 Brits having to self-assess, so we’ll see where this one goes.

Still, hopes are high that the online system will enable a good number of individuals to avoid having to self-assess any more. If you ask me, this might be a big help, but I have to be honest – I don’t have high hopes. For what it’s worth, the Government tends to bollocks things up about twice as often as they make things easier; I’m sure I’m not the only one here that remembers how that new IR35 guidance last year absolutely made things abysmally bad for contractors – and that’s something the freelancing community is still recovering from!

So no, I don’t have a particularly large amount of faith in HMRC, the Treasury, or anyone who’s ever set foot in Downing Street, no matter the jaunty cut of their bespoke tailored suit. Can you really blame me, though? the Government has been flailing about for years now in an attempt to streamline things only to make them unaccountably worse, and I really don’t want to see it happen any more.

Sadly I doubt any of us will ever live to see the day that things straighten themselves out on their own, so we’ll just have to wait and see what new horrors the Government unleashes on us next. Who knows – the law of averages says that eventually there should be a winner eventually. I’m not holding my breath, though.

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HMRC to hand out 750,000 £100 late penalties

Her Majesty’s Revenue & Customs are set to hand out 750,000 late penalties to the quarter of a million small business owners who missed the 31 January deadline.

The tax return deadline has come and gone, and anyone who didn’t get their self-assessment tax return will now end up being fined a minimum of £100 now that they’re officially late. Of course, the taxman is keeping track of how long it will take you, as you could end up being charged as much as £900 in fees – £10 for every day past 31 January that you delay further – so the time to act is now before you end up being charged an arm and a leg for your tardiness.

However, if you missed the deadline, HMRC may grant you a waiver if you have a valid reason such as illness or family bereavement. If not, you will end up facing additional penalties of 5 per cent of the tax owed or £300 after a six month delay – and this fee will increase by another £300 if you let a whole 12 months go by.

The taxman has been clamping down on late returns as of late, according to accountancy experts. In fact, last year saw approximately £1 billion in penalties issued by HMRC, and tax specialists say that you simply must act quickly to avoid being subject to massive late fees and fixed penalties.

Of course, what you should have done was not have waited until the last minute anyway, but it’s a bit late for that. The best you can do now is to file your taxes immediately before the fees mount too high.“Whilst we are urging people not to delay in filing, first make absolutely sure you haven’t been issued a tax return in error; for instance your business may have ceased trading and HMRC may not have the changes on record.”

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