By Ola Sulaimon
FINALLY, January 31st deadline is gone, and we can all breathe.
In this month I would like to remind people about the risk of leaving it too late - perhaps this would make us get the accounts in as soon as possible.
* Risk of submitting an incorrect return
Lack of time and pressure can mean there is a risk of submitting an incorrect return. All the taxpayer's information needs to be included but rushing to complete the return means that incorrect details are missed like income earned elsewhere or expenses over or under claimed.
The HMRC impose a penalty based on the potential lost revenue (unpaid tax) using a percentage calculation that relates to taxpayer's behaviour which could range from 0 per cent to 100 per cent.
* Risk of paying incorrect tax
The tax an individual will pay is always based on the accounts and return submitted. Invariably, if we send an incorrect return, we are apparently paying lower tax or more tax.
If any individual pays too much tax they can reclaim this by submitting an amended tax return within 12 months of the regular filing date.
If this deadline is passed, the individual could write to HMRC for overpayment relief, but there are conditions to be met before this could be used.
The HMRC can amend your returns for apparent errors within nine months of receiving returns submitted but could always reassess the tax unpaid by making a discovery assessment for previous years if the conditions for raising the estimate are met.
* Risk of late submission of tax returns
When returns are submitted late, the initial penalty would be £100. If the returns are not submitted for more than three months there is a daily penalty of £10 which will be imposed up to 90 days. If the return is still not provided after six months, an additional fine of five per cent of the tax liability or £300 will be imposed and for more than a year it is an additional £300 fine or 5 per cent of liability to tax.
The advantage of early submission is that it gives you opportunities to submit your return timely and avoids fines and penalties, so I would advise you escape the rat race by submitting your returns promptly
To find out more contact Ronzl Accountants Ltd, 51 Billing Road, Northampton. Call 01604 965826 or see the website at www.ronzlaccountants.co.uk