If you have income which has not been taxed or are liable for higher rate tax or have been sent a self-assessment tax return by IRS, we can help. Even though you have no income to declare, you have a legal obligation to complete and submit a tax return as well as paying any tax liability due by certain deadlines. Failure to do so could result in penalties, interest and surcharges becoming payable in addition to the tax liability. The deadline for submitting a paper tax return is April 15, following the end of the tax year.
Although, where the tax payable exceeds $1000 you may also be required to make provisional payments on account for the following tax year of the same amount, divided into two installments payable by 31st January of that tax year and the following 31st July. Any balancing payment due, once the tax return has been completed and the final tax liability calculated, after taking into consideration the payments on account, becomes payable by the following 31st January.
Late payment of the tax liabilities will result in interest charges running on a daily basis currently at a rate of 2.5%. A 5% surcharge can also apply where the tax remains unpaid after 28th February and again after 31st July.
However, the $100 penalties, interest and surcharges can be avoided, even where the tax return is submitted late, provided a sufficient amount of tax has been paid by the 31st January (and the previous 31st July and 31st January where payments on account were due) to cover the final liability. The penalties cannot exceed the tax outstanding, up to a maximum of $100.
If the completion of your tax return is a daunting prospect, with deadlines looming and not wanting to pay any more tax than is absolutely necessary, why not use our tax return preparation service. I will provide you with a checklist to assist you in collating the relevant information and supporting documentation required to complete the tax return, letting accounts, capital gains tax computations etc, a nd calculate your tax liabilities, as appropriate, advising you when payments should be made.