Most small business owners, directors and freelance contractors will be aware that the dreaded self-assessment tax deadline is around the corner. Online returns need to be filed by 31 January to avoid a fine and as can be seen from the list of worst excuses for not filing on time, released by HMRC, some people will try anything to avoid tackling the form:
1. My pet goldfish died
2. I had a run-in with a cow
3. After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else
4. My wife won’t give me my mail
5. My husband told me the deadline was 31 March, and I believed him
6. I’ve been far too busy touring the country with my one-man play
7. My bad back means I can’t go upstairs. That’s where my tax return is
8. I’ve been cruising round the world in my yacht, and only picking up post when I’m on dry land
9. Our business doesn’t really do anything
10. I’ve been too busy submitting my clients’ tax returns (a London accountant!!)
All of these businesses received a £100 penalty from HMRC for late filing.
HMRC’s Director General of Personal Tax, said “There will always be unforeseen events that mean a taxpayer could not file their tax return on time. However, your pet goldfish passing away isn’t one of them. If you haven’t yet sent your 2012/13 tax return to HMRC, you need to do it online and pay the tax you owe by the end of January. With all the help and advice available, there’s no excuse not to.”
HMRC have reminded small businesses and the self-employed that if they still don't file their return and pay the tax due within a three-month probation period after 31 January, they can expect a further fine of £10 per day, up to a maximum of £900 plus a further fine of 5% of the tax due, or £300, whichever is greater.
The reasons why so many people risk late filing fines can perhaps be gleaned from the Federation of Small Business's 2013 report about how the smallest businesses are let down by the the traditional accountancy support model, which said:
- Half the owners of the UK's smallest businesses spend up to eight hours per month on tax admin
- For 11% tax admin takes an astonishing six days per month
- Two thirds of owners estimate the cost of dealing with tax obligations at over £3,500 pa
- Despite this one in five said a lack of understanding about the tax system has led them to miss tax deadlines
- One in three said a lack of cashflow planning had led to them not paying taxes on time
The use of a streamlined online accountancy service like Orange & Gold, removes the need for any of this hassle, provides a 24/7 view of what tax is owed and all for less than £800 pa... happy days!!