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Company owners face stiff penalties for missing tax return deadline

Limited company owners should make sure they meet the annual self-assessment deadline at the end of this month, as penalties for late submission can increase significantly the longer a return is outstanding.

Don’t miss the SA deadline

The deadline for submitting self assessment forms is 31st January, and all tax liabilities must also have been paid to HMRC by this date.

All limited company directors must complete a tax return, and if you receive untaxed income from non-employment sources, you may also have to register for self-assessment. The controversial changes to the Child Benefit system may also result in a further half million people having to complete a return.

Even if you have no tax to pay, all company directors are still obliged to complete a tax return each year.

It is your responsibility to register for Self Assessment

Importantly, before you can submit your return online, you first have to apply to use HMRC Online Services. You shouldn’t leave this too late as the activation code can take at least 7 days to arrive at your home address.

Your accountant will typically offer to complete the self assessment return on your behalf, but don’t assume this will be automatic – it is the taxpayer’s responsibility.

Many firms offer tax return submission as an additional service, as the costs for dealing with your personal tax affairs cannot be claimed back from your limited company.

Late tax return penalties

An escalating series of penalties apply if you fail to deliver your tax return to HMRC by 31st January. If you are just one day late, an automatic £100 penalty is applied. After this point, you will pay £10 per day from 3 months onwards (up to a maximum of £900), then a fixed penalty of £300 (or 5% of the overdue tax) in addition to the earlier charges. At 12 months, a further £300 / 5% charge will be made, on top of all other charges mentioned previously.

Visit the HMRC site for more details on the SA penalty regime.

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