As small business owners you have various responsibilities to take control of every day. If you don’t, or don’t employ someone to do so you could face penalties in the future such as the fines from the HMRC. Below is some information you should know about the penalties.
Late Tax Returns
To some business owners it is a mystery case when the HMRC send a tax demand which has additional penalties. In some cases the fines are £100 because of late tax returns, which have to be expected when you submit them later than the requested date. This occurs even if you are one day later from the 31st January. If you are even later, say February, March or April time with your tax return you can expect to incur daily fines which can last for up to 90 days before serious penalties start to add up.
In some cases you can contest the penalties, but the HMRC are not flexible and will not be lenient with excuses, as trust me, they have heard them all before. If you were to file the tax return and do as you were requested, but chose not to pay the fines, then you will be charged 5% of the tax due (if 30 days late) then another 5% for the next three months. This fine repeats every 12 months but before then the HMRC will have chased and chased you as they never let anything slip through the net.
Other Penalties
Other penalties that can occur come from mistakes on your tax return. It is important that you take great care when filling out your tax return to avoid these fines where possible. If your mistake was careless you will incur fines as it can be seen as a deliberate fault in the HMRC’s eyes.