How to Avoid HMRC Tax Penalties

Help with Avoiding HMRC Tax Penalties from Premier Accountants in Glasgow

Proper accounting is important for the success of every business. So if you plan on being self-employed or you are currently building your business, this is something you should be aware of. At Premier Accountants in Kirkintilloch, Bishopbriggs & Glasgow, we bring you a guide on how to avoid HMRC tax penalties and self assessment penalties.

Accounting mistakes and poor handling of financial records can lead to the contractual problem, a cut in company’s income and they could also attract penalties from HMRC. As a business owner, you should know that by law you are meant to keep accurate and timely account records, make payment promptly and ensure timely submission of all required paperwork and processed returns.

What are the Late Filing Penalties for Self-Assessment?

Every registered self-employed person is to complete a yearly self-assessment form and submit before the circulated deadline. Paper tax returns are to be completed and submitted on or before midnight on 31st of October while online returns are to be completed by midnight on January 31st. A single day delay in submission will attract a penalty and those who delay submission by more than a day will have heavier penalties.

  • There is a £100 fine for submitting a return three months from the deadline.
  • Delaying tax returns for 6 months attracts a fine of £100 plus 5% of the tax due or £300, whichever is greater.
  • Delaying submission of forms for a year attracts the £100 penalty and an additional 5% of the tax owed or £300, whichever amount is greater.
  • In some serious cases, HMRC can demand 100% of the due tax, it has the power to do so. In such cases, you end up paying twice the amount owed in taxes.

Tax Penalties for Private Limited Companies

If your company is liable for corporation tax, then it is important you inform HMRC of these liabilities within a year after your corporation tax liability period expires. You will also be penalised if you do not deliver your return on the date specified in the circular to submit a tax return.

Depending on how HMRC see your actions, penalties can range from 0 – 100 %. Penalties are mild if HMRC see your excuse as genuine and reasonable and they can be harsh if HMRC views your actions as deliberate. Deliberately concealing your mistakes also results in harsh penalties.

What are Penalties for Late Filing With Companies House?

  • Filing yearly accounts late by less than a month attracts a fine of £150 and £750 for private and public companies respectively.
  • Submitting late by a month and three months takes the fine up to £375 and £1500.
  • Penalties of £750 and £3000 are given for submission that is late by 3 to 6 months.
  • Filing of accounts six months after the due time attracts a fine of £1500 and £7500.
  • Consecutive late submission of the file up to the next year attracts double the initial fine in the second year.

How to Avoid HMRC Late Filing Penalties

You can appeal a HMRC decision to fine you or your company, but an appeal will be successful only if you can present a cogent excuse for filing and paying late. You can also prove that you were frugal and that errors made were simply mistakes that were out of your hands, HMRC may take a decision against imposing fine in such a case.

Penalties can affect your company strongly and cause you financial troubles so it is better to avoid them completely and the only way to do this is to keep up-to-date records, ensure early submission of all necessary paperwork and make all required payments on or before the deadline.

Preparing yearly accounting records and the tax return is time-consuming and can be tedious, particularly when you are paying attention to every detail and making sufficient research to avoid overpayment or underpayment of tax.

A professional accountant ensures that your records are up-to-date at all times, ensures the risk of being penalised is also eliminated and that all necessary payment are paid in due time always.

Book A Free Accounting Consultation at Premier Accountants in Glasgow

At Premier Accountants in Glasgow, we help our clients keep up to date with latest developments and compliance requirements and hence saving from penalties etc. Give us a call on 0141 775 0070 for more information.

How We Can Help:

  • We help clients build a smart business which results in higher efficiency in business operation.
  • We keep clients up to date with latest developments and compliance requirements and hence saving from penalties etc.
  • We offer fixed price services, which means no surprise bills. Our quote stays same throughout the year and you can enjoy the services by paying a fixed monthly bill
  • At the time of signing up, we carry out a health check
  • You will enjoy unlimited ad hoc advice with the freedom to get in touch anytime and have your queries answered within four hours.
  • We provide a 5-star service, working with a limited number of clients, thus providing a very tailored service to meet your needs.
  • We keep in touch with you throughout the year to ensure you’re keeping records in the correct order etc.
  • We conduct a pre-year end tax planning meeting with the client to ensure those right decisions can be taken before they year end.
  • We use the finest and latest cloud technology in the industry to increase efficiency &reduce cost. This eventually transfer the benefit over to you as you will have complete use of our cloud software with a paperless office, allowing us to access client information even if we are not in the office.

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