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Don’t let Mr Scrooge the tax man ruin your happy New Year!

Oct 28, 2016

It was a cold crisp evening and Bob Cratchit was preparing his Christmas dinner – the usual humble pie and parsnips. He’d had a good year in business but there was something troubling him. He was sure he’d forgotten all about something, something important but ... ah well. He was sure it would come back to him.

New Year follows Christmas (as it does): the start of another year. Bob’s boot shop is busy and he doesn’t have a minute to himself. He’s still worried that there’s something he should have done, but he just can’t think what it was. “Never mind,” he says to himself, “it can’t have been that important after all.”

Late one night, as the clock strikes midnight and the calendar flips over to February, Bob is snoring away when he’s suddenly woken by the squeak of his bedroom door. Terrified, he sits up and sees .... Mr Scrooge, the friendly tax inspector, standing in the doorway! At that moment he remembers what it was he forgot to do all those weeks ago .... his tax return! But it won’t matter, will it? It’s only a little bit late ... and Mr Scrooge seems like such a reasonable chap!

At least, that’s what Bob Cratchit thinks. Mr Scrooge knows better ... because late tax returns mean lots of extra income for the tax man!

Missing HMRC’s tax deadlines can be an expensive mistake. If you haven’t yet completed your tax return for 2015/2016 you have until midnight on 31st January 2017 to submit it online. If you miss that deadline, the fines start to build up.

If you submit your tax return just one day late you’ll get a fixed penalty of £100 – and you have to pay, even if you don’t owe any tax. Delay any further and you’ll be fined £10 a day for a maximum of 90 days – that means if you’re three months late you’ll be paying an extra £1000 in fines alone. And it doesn’t stop there. Delay any longer and in addition to the £1000, you’ll be billed an extra £300 or 5% of the tax due, whichever is higher. The staged tax payment dates may be withdrawn too, leaving you having to pay your tax bill in one lump sum.

So don’t do a Bob this year. If you haven’t yet sorted out your 2015/2016 tax return, take a few hours out during the holiday season to get it done and submitted by the 31st January deadline. Because if you don’t, it could be your turn to eat humble pie next Christmas.

January 31st ... don’t forget! Make sure 2017 really is a happy New Year!