This Content Was Last Updated on April 5, 2023 by Jessica Garbett
Many people are concerned about penalties from HMRC.
These are things that can give rise to one:
- Sending your Self Assessment in late – even by a day. There is an initial fixed penalty, followed by daily penalties of £10/day after three months
- Paying tax late (a few days is normally fine, but you will get charged interest)
- Not registering with HMRC for as Self Employed on time (normally by 5th October after the tax year you started, but do it as soon as you start, its easier)
- Not keeping proper records of business income and expenses (quite uncommon circumstances, major omissions only)
- Making errors on your Self Assessment or business accounts
Generally the risks can be mitigated by getting things done on time and accurately and having the business structure to support this.
Penalties can be appealed, but thats time consuming and often not successful.
Some penalties can be “suspended” but that needs looking at on a case by case basis.
Penalties are not tax deductible.
The key thing here is to:
- Keep accurate records
- Make sure your returns are submitted on time
- Make sure tax is paid on time