If you are a self employed fitness professional or running your own business you need to ensure that you file your tax returns on time and this year the dates have changed.
For the first time a new, earlier deadline of 31st October is in force for the filing of paper Tax Returns. Miss this and HM Revenue and Customs normally seek to impose a fine of £100. However, you could still register for online filing and buy yourself a few extra months until the online filing deadline of 31st January 2009.
Once Returns are filed, any tax due must be paid by 31st January, regardless of whether the returns were filed by paper or online. Electronic filing has the added advantage that any tax refunds due are usually are paid out much more quickly!
You should also be warned that HMRC are introducing new legislation outlining a penalties procedure that they say will make the tax system ‘simpler and more effective’.
HMRC state that those who have taken reasonable care to properly and accurately complete their tax returns will not be penalised under the new regime. The intent is to support people who want to comply, and come down hard on people seeking to gain an unfair advantage through non-compliance.
To be liable for the penalties, a return document must contain an inaccuracy that leads to underpayment of tax, or a false or inflated statement of loss or claim to repayment.
The penalties will be calculated based on whether the inaccuracy is careless or deliberate, concealed or not, and whether disclosure is prompted or unprompted. Penalties will be as follows:
A careless inaccuracy – 0 to 30% of the tax due.
A deliberate inaccuracy – 20% to 70% of the tax due.
A deliberate and concealed inaccuracy – 30% to100% of the tax due.
It is expected that the 2008 Finance Bill will extend the regime to cover almost all of the taxes, levies and duties in this country. The new legislation is purported to harmonise the differing penalty regimes of the former Inland Revenue and former Customs & Excise, who have now of course been amalgamated into one organisation, H M Revenue & Customs. It was felt that the level of penalties actually being charged was too low to encourage disclosure or act as a deterrent. In the past the two organisations have had differing attitudes to the application of penalties…we are waiting to see how this rationalisation will apply in practice.
Article provided by Mike Turner, partner at Bentleys Chartered Accountants, Bolton. www.bentleys-accountants.co.uk