If you have failed to send in your tax return for the 2010-11 tax year you may have received an unwelcome Christmas or New Year letter from the taxman detailing a fine of £1,300 or more. However, there are a number of things you can do to mitigate or even remedy the situation. Richard Mannion, national tax director at Smith & Williamson, sets out five steps.
1. The first question to consider is whether you have a reasonable excuse for the delay. HM Revenue & Customs' guidance gives examples such as documents being lost through theft, fire or flood, serious illness and bereavement. But bearing in mind that we are now a year down the track, this will be a high hurdle to jump.
2. The next question is whether you should really be in the self-assessment system. It may be that your tax affairs are straightforward and you don't need to complete a tax return, in which case you can be taken out of the system and the penalties will be cancelled. HMRC guidance advises taxpayers in this position to call the Self-Assessment Helpline and they will tell you whether you still need to complete a tax return. The number is 0845 900 0444 and available from 8am to 8pm Monday to Friday, and from 8am to 4pm on Saturday.
3. If you do need to stay in the self-assessment system and don't have a good enough excuse, take urgent action. Most important, file your 2010-11 return electronically before 31 January 2013 to avoid the penalty increasing from £1,300 to £1,600. An earlier deadline applies for hard copy self-assessment tax returns as the trigger point for the additional £300 has already passed.
4. If you are missing some details of income you should make your best estimate and explain this in the additional information box.
5. Unless there is a good reason why you do not need to be in the self-assessment system, be sure to file your 2011-12 tax return electronically before 31 January 2013 so as to avoid the cycle starting all over again.
