Being a taxpayer, there is a high probability for you to make the mistake of filing incorrect tax returns due to carelessness at some point of time. As a result, you cannot possibly stop hefty penalties on your way.

And, there is HM Revenue & Customs (HMRC) that decides whether you have been careless or deliberately tried to conceal some information from them. Depending on this, you will be charged penalties.

• You do not have to pay any penalty if you have filed your tax returns correctly.
• If you have been careless and filed your returns incorrectly, the penalty will be between 0% and 30% of the extra tax owing.
• In case if you have deliberately filed your tax returns incorrectly, the penalty will be between 20% and 70%.
• If you have deliberately filed your returns incorrectly and conceal this fact from the HMRC, the penalty will be between 30% and 100%.

Apart from filing incorrect returns, you need to keep in mind that you will be charged interest from the date the payment is due to failing to pay on time. Besides, the interest rate also varies so you need to be very careful.

If you are three months late to pay your returns, you will be charged a fine of £10 a day up to the 90 day maximum of £900. This fine will go up to £300 or 5% of the tax due, whichever is greater if you are six months late. And, if you are 12 months late, you will get another £300 fine or 5% of the tax due, whichever is the higher.

HMRC also considers some reasonable excuses for missing deadlines for paying tax returns. Such reasonable excuses like recent death of a partner, computer failures, illness, and service issues with the tax authority’s online services are usually something unexpected which do not have control over. However, each case will be considered taking its merits into account.

If you are finding it difficult to file and complete your tax returns and pay on time, get help from expert accountants immediately.