The Low Incomes Tax Reform Group (LITRG) is advising people that if they miss the 2016/17 paper tax return deadline of 31 October 2017 they can avoid late filing penalties by submitting their return online by 31 January 2018.
However, LITRG is warning people not to leave doing it until the last minute. Extra time should be allowed – at least 10 working days before 31 January 2018 – to complete and send their tax return to HMRC if they are using self-assessment online for the first time. This is because they will need to enrol into and ‘activate’ HMRC’s online self-assessment service first using a code they will be sent in the post. More time may be needed if the person does not have a Unique Taxpayer Reference (UTR) number already.
LITRG Deputy Chair Chris Jones said:
“If you are used to doing things on paper, then we know it can be daunting to switch to doing things online. HMRC’s online self-assessment service is quite user friendly and if using it will help you avoid a late filing penalty for missing the paper filing deadline, then this is all the more reason to give it a go.
“We recognise that some people may be put off doing this by the different ways of getting into HMRC’s online self-assessment service, such as via GOV.UK Verify or the Government Gateway. We urge taxpayers who miss the paper filing deadline to use our digital services guide to help them. This explains everything to do with HMRC’s digital services and takes people, step by step, through the process of setting up an online self-assessment account with HMRC.1
‘’If you need some assistance to deal with your tax return online – perhaps because you lack IT skills or because you do not have internet access – you can ask for help by phoning HMRC. They can help you find access to a computer and the internet, input information on your behalf or help you to do this yourself, or arrange a face to face visit if your circumstances require one.”
People who want to submit a paper tax return to HMRC for 2016/17 should do so by 31 October 2017. If a paper tax return is submitted after this date in paper form rather online, then a £100 penalty will automatically be charged, with penalties potentially rising up to £1,600 depending on the length of the delay. This penalty can be avoided by following LITRG’s advice and submitting an online return instead of a paper return by 31 January 2018.
There is further good news for people who failed to tell HMRC that they needed to complete a tax return for the first time for the 2016/17 tax year – the deadline to do this was 5 October 2017. Where the 5 October deadline is missed, a person should still register as soon as possible. Provided they get a tax return to HMRC and pay anything they owe by 31 January 2018 there will no penalty for ‘failing to notify’.
Chris Jones added:
‘‘There are different ways of telling HMRC you need to complete a tax return depending on whether you are self-employed or not. But in all cases, HMRC will need time to process your information and issue you with a Unique Taxpayer Reference (UTR). Once you have got this, you may need to set up an online self-assessment account as a separate step, which can take at least 10 working days in itself. So realistically, if 2016/17 is your first year of self-assessment but you have not asked HMRC for a UTR, you may be looking at needing at least 20 days to get everything in place to meet the 31 January 2018 deadline.’’
Notes for editors
1. LITRG’s digital guide can be found here
2. GOV.UK information on registering for and filing a tax return can be found here
3. Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk (Out of hours contact: George Crozier, 07740 477 374)More Articles by Chartered Institute of Taxation (CIOT) ...