Valid and Not So Valid Late Tax Return Excuses
For businesses not eligible for Simple Assessment Tax, filing tax returns will never be the most exhilarating part of owning a business, but that doesn’t stop it from being an absolutely essential part of your annual accounts.
In 2020 alone, HMRC received 10.7 million tax returns from UK businesses on time, with many companies opting to use services like Gorilla Accounting, specialist self-assessment tax return accountants, to ensure that deadlines are met and taxes are efficiently paid. However, 1.8 million businesses missed the self assessment deadline.
As you can probably imagine, the excuses for delivering a late tax return come in many different shapes and sizes. Whilst many are accepted as reasonable in the eyes of HMRC, there’s an equal number of ridiculous excuses that simply won’t wash.
In this blog, we’ll take a look at some of the more reasonable excuses permitted by HMRC, the more far-fetched claims, and the fines that can come with late payments.
The Good
In spite of their relatively hardline approach to business finance, HMRC does understand that circumstances outside of your control are always capable of cropping up at exactly the wrong moment.
Therefore, there are legitimate, reasonable excuses which they’ll accept for the late arrival of a tax return, including:
- A partner or close relative died shortly before the deadline
- An unexpected stay in hospital prevented you from dealing with your taxes
- You experienced a serious or life-threatening illness
- Service issues with HMRC online services
- A fire, flood or theft which directly affected your ability to file your tax return
The Bad
Reasons that won’t wash quite so well range from the unreasonable to the ridiculous. It might seem harsh in places, but reasons which are not considered reasonable include:
- Someone else was asked to send the return and they didn’t
- Your payment bounced due to a lack of funds
- You weren’t able to easily navigate the HMRC system
- You never received a reminder from HMRC (this is your responsibility)
- You made a human/financial error on your tax return
- Disorganisation: choosing to submit your self assessment tax return at the last minute can often end badly
The ‘fun’ really starts when business owners begin to stray into the realms of creativity with their excuses and HMRC have seen it all over the years. In January 2018, they released the latest batch of far-fetched excuses they’d received, anonymously, of course, to help business owners better understand what is and isn’t acceptable.
Some of the most bizarre included:
1. I couldn’t file my return on time as my wife has been seeing aliens and won’t let me enter the house.
2. I’ve been far too busy touring the country with my one-man play.
3. My ex-wife left my tax return upstairs, but I suffer from vertigo and can’t go upstairs to retrieve it.
4. My business doesn’t really do anything.
5. I spilt coffee on it.
6. My tax papers were left in the shed and the rat ate them.
7. I’m not a paperwork orientated person – I always relied on my sister to complete my returns but we have now fallen out.
8. My accountant has been ill.
9. My dog ate my tax return.
10. I will be abroad on deadline day with no internet access so will be unable to file.
11. My laptop broke, so did my washing machine.
12. My niece had moved in – she made the house so untidy I could not find my log in details to complete my return online.
13. My husband ran over my laptop.
14. I had an argument with my wife and went to Italy for 5 years.
15. I had a cold which took a long time to go.
The Ugly
Whilst it’s all well and good joking around with far-fetched excuses, HMRC doesn’t take quite the same lighthearted approach to late submissions.
All tax returns must be submitted, and owed taxes paid, by the 31st January deadline. Failure to meet this deadline will start the penalties process, a figure that increases significantly the longer your taxes go unchecked.
Any individual or company that misses the 31st January cut off will immediately be subjected to a £100 fine, no matter whether you have tax to pay or not. You’ll have up to three months to get your accounts up to date and settle the fine before further charges are added.
After these three months are up, you’ll receive an additional penalty of £10 per day, up to a maximum of £900, effectively giving you another three months to get on top of everything.
Once six months have elapsed, HMRC really begin to ramp up the fines. You’ll face an extra charge of 5% of the unpaid tax or £300, whichever is greater, at six months and then at 12 months which can have a major impact on your business finances.
You may have submitted your form on time and then later discovered an error on the form. Don’t worry, you can amend your self-assessment tax return form.
Why use Gorilla Accounting?
Using a service like Gorilla Accounting can result in a huge number of financial and administrative benefits for your business. However, by working with us throughout the year we’ll be able to take on the responsibility of your submitting your tax returns on time just as long as you provide us with the information we need in good time.
As part of your £85 + VAT per month package, you’ll also receive complete access to FreeAgent – the online accountancy software that will provide you with tax return reminders and easy access to the information you’re likely to need to get your taxes paid on time.
In addition, if you are reading this while approaching the self-assessment tax return deadline and would like to do it yourself, our guide to filing the self assessment tax return may help you.
For more information on appointing Gorilla Accounting as your accountant, contact us today and a qualified member of the team will get in touch to discuss the best time to complete your switch.
