Filing accounts and tax returns late, not paying tax on time or making errors in your figures can result in fines and penalties being imposed. Many of the fines are progressive meaning that they increase the longer the missed filing is left.
Without going into the detail of the many and varied fines and penalties that can be imposed by both HMRC and Companies House the key takeaway is not to miss deadlines and to make sure that your accounts and tax returns are complete and accurate.
Ignorance is not accepted as an excuse by HMRC; they will simply insist that if you didn’t know what you needed to do, when and how then you should have appointed an advisor or accountant to assist you.
That said, if there is a reasonable excuse for late filing HMRC will allow an appeal against any penalty or fine. A reasonable excuse includes, but is not limited to, a bereavement of a close family member, an unexpected stay in hospital, a serious illness, a failure of a computer or software whilst you were completing your tax return, fire, flood or theft as well as postal delays or an issue with HMRC services.
The HMRC web site provides more information about what is considered a reasonable excuse and goes on to explain how to make an appeal.
It is worth remembering that a Limited Company can also receive a fine for the late filing of the accounts, but not a Confirmation Statement, from Companies House. This is quite separate to the fines from HMRC and any Companies House fines do double in the second year if the deadline is missed again.
The deadlines for filing accounts and tax returns are generous and, unless there is a reasonable excuse, there is more than enough time to meet your obligations especially if you have kept on top of your accounting as you go. Filing your accounts and returns well in advance of the deadline is a good practice to follow remembering that the tax does not have to be paid until the due date as long as you have the necessary disciplines in place to ringfence the tax money and not spend it elsewhere.