No, the deadline (31-01-2023 ) for Self-assessment has not been and will not be extended this year -2023. Unlike in the past two years, HMRC did not announce any relaxation of late submission and late-payment penalties for the 2021/22 tax year. So if you could not file your 2021/22 tax return online by 31 January 2023 you may face penalties and interest by HMRC.
According to the figures revealed by HMRC, around 2.7 million people, who were supposed to file them by 31st Jan. 2023, could not file self-assessment tax returns.
If you file late, you will also have to wait longer for the tax year to be deemed 'closed' as HMRC will have more time to investigate. For example, if you submitted your return on or after 15 February 2023, HMRC has until 30 April 2024 to ask you questions about it.
What Can Happen If You Could Not Pay Your Self-Assessment Tax This Year?
If you are required to file a self-assessment tax return in the UK and fail to pay the tax owed by the deadline, you may face a number of penalties and consequences. Here is an overview of the most common penalties you may face if you don't pay your self-assessment tax on time:
Late Payment Penalties: If you don't pay the tax owed by the deadline, HM Revenue & Customs (HMRC) will charge you a late payment penalty. The first penalty is a fixed amount of £100, regardless of the amount of tax owed. If the tax remains unpaid after three months, additional penalties of 5% of the tax owed may be charged, and another 5% if the tax remains unpaid after six months.
Interest Charges: In addition to the late payment penalties, you may also be charged interest on the tax owed. The interest rate is based on the Bank of England base rate and is charged from the day after the payment deadline until the tax is paid in full.
Legal Action: If you continue to not pay the tax owed, HMRC may take legal action to recover the debt. This may include wage garnishments, bank account freezes, or property seizures.
Reputation Damage: Failure to pay your self-assessment tax on time may also harm your reputation, as it shows a disregard for your tax obligations and may be perceived as unethical.
Criminal Prosecution: In severe cases, HMRC may pursue criminal prosecution for tax evasion, which can result in a fine and even imprisonment.
Loss of Tax Credits: If you don't pay your self-assessment tax on time, you may also lose any tax credits you were entitled to.
Damaged Credit Score: Not paying your self-assessment tax on time may also negatively impact your credit score. A poor credit score can make it difficult to obtain loans or credit in the future.
It is important to pay your self-assessment tax on time to avoid these penalties and consequences. If you are unable to pay the tax owed by the deadline, you should contact HMRC to make arrangements to pay the debt over time.
Remember, if you are in financial difficulty, HMRC may be able to offer you support and help you manage your debts. It is always best to contact HMRC as soon as possible to discuss your options and avoid incurring further penalties and interest charges.
What Should You Do If You Could Not Pay Your Self-Assessment Tax in Time?
If you are unable to pay your self-assessment tax by the deadline in the UK, it is important to take action as soon as possible to minimize the penalties and consequences. Here are some steps you can take if you find yourself in this situation:
Contact HM Revenue & Customs (HMRC): If you are unable to pay your self-assessment tax on time, it is important to contact HMRC as soon as possible. They may be able to offer you support and help you manage your debts.
Negotiate a Payment Plan: HMRC may allow you to pay the tax owed over a longer period of time, reducing the amount you need to pay in each installment. It is important to negotiate a payment plan as soon as possible to avoid incurring additional penalties and interest charges. Click here to know more about setting up a payment plan.
Apply for Time to Pay: If you are in financial difficulty, you may be eligible for HMRC's Time to Pay service, which allows you to pay the tax owed over a longer period of time.
Use a Tax Accountant: If you are having difficulty managing your self-assessment tax, you may consider using a tax agent to help you. A tax accountant can provide expert advice and assist you in negotiating a payment plan with HMRC.
Reduce your expenses: If you are in financial difficulty, it may be necessary to reduce your expenses in order to free up money to pay your self-assessment tax. This may include cutting back on unnecessary expenses, such as entertainment and eating out, and seeking ways to increase your income.
Seek Financial Advice: If you are having difficulty managing your finances, it may be helpful to seek financial advice from a professional. A financial advisor can help you create a budget and provide advice on managing your debts.
Declare Bankruptcy: If you are unable to pay your self-assessment tax and are unable to make arrangements to pay the debt over time, you may need to consider declaring bankruptcy. This is a last resort and should only be considered if all other options have been exhausted.
Remember, it is always best to contact HMRC as soon as possible if you are unable to pay your self-assessment tax on time. They may be able to offer you support and help you manage your debts. By taking action early and seeking advice, you can minimize the penalties and consequences of not paying your self-assessment tax on time.
How Can We Make an Appeal to HMRC If We Could Not Pay Your Self-Assessment Tax in Time?
If you have been charged penalties and interest for failing to pay your self-assessment tax on time in the UK, you may have the option to make an appeal to HM Revenue & Customs (HMRC). Here are some steps you can follow to make an appeal:
Gather Evidence: Before making an appeal, it is important to gather evidence to support your case. This may include documentation of financial hardship, such as bank statements or proof of unemployment, and any other relevant information that may help your case.
Review the Penalties: Before making an appeal, it is important to review the penalties you have been charged and understand the reasons for the penalties. This will help you prepare your argument and understand what points you need to address in your appeal.
Contact HMRC: If you wish to make an appeal, you should contact HMRC to request a review of your case. You can do this by telephone, email or letter.
Provide a Written Statement: When making your appeal, it is important to provide a written statement explaining the reasons for your inability to pay the self-assessment tax on time. This statement should include information about your financial circumstances and any other relevant information that may support your case.
Submit Evidence: Along with your written statement, it is important to submit any relevant evidence to support your appeal. This may include bank statements, proof of financial hardship, and any other relevant information.
Attend a Hearing: If your appeal is unsuccessful, you may be required to attend a hearing to discuss your case further. This hearing will be conducted by an independent tribunal that will review the evidence and make a decision.
Accept the Decision: If the tribunal upholds the penalties, it is important to accept the decision and make arrangements to pay the debt as soon as possible.
It is important to note that making an appeal to HMRC is not a guarantee that the penalties will be waived or reduced. However, by presenting a strong case and providing evidence to support your appeal, you may be able to have the penalties reduced or waived.
If you are in financial difficulty and are unable to pay your self-assessment tax, it is always best to contact HMRC as soon as possible to discuss your options and avoid incurring further penalties and interest charges. By seeking help early, you can minimize the penalties and consequences of not paying your self-assessment tax on time.
What is Determination?
If you were due to file a tax return with HMRC but haven't, they may have sent you a ' determination' of the tax they think you owe. While this is an estimate, it is legally enforceable until you file a late return, which you must do within 12 months of receiving the decision (or three years from the date the relevant late return was filed, whichever is later).
HMRC must send you your return within three years of the date you filed your original return (usually 31 January after the end of the tax year, hence the 'deadline' for HMRC for 2018/19 tax returns to issue the return is for three years from 31 January 2020, i.e. to 31 January 2023). If you fail to file your tax return by the deadline after receiving the decision, the decision will stand unless HMRC accepts a request awarding you 'special compensation'.
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