To minimise the penalty, a business should contact HMRC immediately if they realise a mistake has occurred.
If the payment is made 30 days late, then the amount of interest charged is 5% of the tax liability.
If the payment is made 6 months late, then the amount of interest charged is a further 5% of the tax liability.
If the payment is made 12 months late, then the amount of interest charged is a further 5% of the tax liability.
There are a a few steps your must take if an error has been made while filing your self-assessment tax return:
If a business has estimated figures then it’s important to disclose the reason they were used. If the business has made a tax return and then receives the correct figure, it’s important to make changes to the tax return immediately. This can be done by either contacting HMRC directly or correcting the information on your personal tax account.
HMRC can often reduce the penalty if they assess that the taxpayer has made a mistake carelessly rather than being deliberate.
If a taxpayer states the wrong income they earned from other countries, then the amount of penalty the business has to pay depends upon the country.
If a taxpayer thinks that the decision taken by HMRC is wrong, they are able to appeal against the decision. The taxpayer is required to make the appeal within 30 days of the decision.
Overall, the blog has considered the result of omitting true taxable income, and the penalties charged on late payments.
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