“My Dog Ate My Tax Return”: When Is It Okay Not to Submit Yours?
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Tax advice
23
January 2022

“My Dog Ate My Tax Return”: When Is It Okay Not to Submit Yours?

“I had an argument with my wife and went to Italy for 5 years” is the perfect example of an excuse that HMRC *won’t* accept for a late tax return. So what does count as a reasonable excuse? And is it ever okay not to submit a tax return? We explain all in this blog.

Hannah Watkins
Hannah Watkins
Content & Campaigns Lead at Coconut
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Over recent years, HMRC has occasionally released lists of the worst—or most unusual—excuses they’ve received for late tax return submissions. And they’re golden.

We’re talking…

  • “My tax return was on my yacht…which caught fire”
  • “I couldn’t complete my tax return, because my husband left me and took our accountant with him. I am currently trying to find a new accountant.”
  • “I had a cold which took a long time to go”
  • “A wasp in my car caused me to have an accident and my tax return, which was inside, was destroyed”
  • “I had an argument with my wife and went to Italy for 5 years”
  • "I’ve been cruising round the world in my yacht, and only picking up post when I’m on dry land"
  • "My mother-in-law is a witch and put a curse on me"
  • and “my laptop broke, so did my washing machine”.

And there’s plenty more where they came from. If you’re ever in need of a break, we’d highly recommend you watch this video for a bit of a chuckle.

Needless to say, none of these excuses flew with HMRC. 

But is that always the case? In this blog, we dig into when—if ever—it’s okay to not submit a tax return or pay your dues...and what to do if you have a genuine excuse preventing you from doing yours on time.

(And just for the record: “the dog ate my tax return” won’t cut it).

So, when is it okay not to file and pay your tax return?

The short answer is: never. If you need to pay tax, there’s no getting out of it.

The only justification for not doing a tax return at all, is if you don’t have to do a tax return in the first place—for instance, if you’re employed. Employees are usually paid through the PAYE system, which means tax is deducted from your paycheck before it arrives in your bank account.

The other most likely reason is if you earned less than £1,000 (before deducting anything you can claim tax relief on, such as expenses) from self-employment.

This might apply if you have a job where you earn PAYE, but also have a side-hustle. You can earn up to £1,000 in the tax year on your side gig before you have to declare it, due to the Trading Income Allowance. If you want to double check your own situation, you can use this tool to find out if you need to do a Self Assessment tax return.

If you’re self-employed, though, and have earned more than £1,000 in a tax year, chances are you’re going to need to do a Self Assessment tax return.

All of the above said, there is a difference between not filing and paying your tax at all, and doing so late. HMRC aren’t heartless! And they understand that certain circumstances might prevent a taxpayer from meeting their deadlines. They call these ‘reasonable excuses’.

What happens if you file or pay your taxes late?

Before we dig into what exactly these ‘reasonable excuses’ are, let’s just briefly cover what happens if you do miss a tax deadline.

If you file or pay your tax return late, you’ll be faced with some pretty hefty charges from HMRC, that increase significantly the later you are.

This HMRC calculator can give you an estimate of how much you’ll need to pay in penalties and interest if you’ve missed the deadline to send your tax return or pay your bill.

2020-21 Self Assessment deadline changes

Just as a reminder: for 2020-21 Self Assessments, HMRC is waiving late filing and payment penalties for Self Assessment taxpayers until 28th February. This means that:

  • anyone who can't file their return by the 31st January deadline will not receive a late filing penalty if they do so by 28th February
  • anyone who can't pay their Self Assessment tax by the 31st January will not receive a late payment penalty if they pay their tax in full, or set up a
    Time to Pay arrangement by 1st April

But you'll still pay interest on any unpaid taxes from 1st February—so it's still better to pay on time if you can!

Reasonable excuses for filing or paying your tax late

If you do have a ‘reasonable excuse’ for being late, then you can appeal any penalties you receive directly with HMRC.

A ‘reasonable excuse’ is usually defined as being “something unexpected or outside your control that stopped you meeting a tax obligation”. And if HMRC accepts that your excuse is reasonable, they should waive any late charges.

Their website gives the following examples of what might qualify as a reasonable excuse:

  • a partner or close relative died shortly before the tax return or payment deadline
  • you had an unexpected stay in hospital that prevented you from dealing with your tax affairs
  • you had a serious or life-threatening illness
  • your computer or software failed just before or while you were preparing your online return
  • service issues with HM Revenue and Customs (HMRC) online services
  • a fire, flood or theft prevented you from completing your tax return
  • postal delays that you could not have predicted
  • delays related to a disability you have

They also specify that the following will not be accepted as reasonable excuses:

  • you relied on someone else to send your return and they did not
  • your payment failed because you didn’t have enough money
  • you found the HMRC online system too difficult to use
  • you did not get a reminder from HMRC
  • you made a mistake on your tax return

Do remember that reasonable excuses are decided on a case-by-case basis. And, at the end of the day—they are all just reasons for why your return or payment is late. 

Even if your excuse is accepted by HMRC, you’ll still need to send your return or payment as soon as possible after your reasonable excuse is resolved.

How to appeal a late return or payment penalty

You can appeal to HMRC against a penalty, and an officer who was not previously involved with your penalty decision will carry out a review. Your penalty may be cancelled or amended if they agree that you have a reasonable excuse.

If HMRC sends you a penalty letter by post, you can use the appeal form that comes with it or follow the instructions on the letter.

If you’re appealing a £100 late filing penalty, you can do so online or by post.

What to do if you’re struggling to pay

If you’re worried about not being able to pay your tax bill on time from a financial perspective, don’t forget that you can make a Time to Pay arrangement with HMRC—which allows you to pay it in instalments.

You can do this through your Government Gateway account if you:

  • have filed your latest tax return
  • owe less than £30,000
  • are within 60 days of the payment deadline
  • plan to pay your debt off within the next 12 months or less

If the above criteria don't apply to you, you can call the Self Assessment helpline.

Get help filling in your tax return

If you’ve not yet submitted your tax return because you don’t know how to, you’re procrastinating, or you just don’t feel like you have the time: we can help you tick that job off your to-do list in half the time.

Our handy guide to doing your Self Assessment breaks the process down into 5 bite-sized chunks, and talks you through everything you need to know about doing your tax return.

We’ve even included a detailed breakdown of exactly what you can and can't expense!

If in doubt: ask an accountant

And finally, if you're feeling uncertain about your finances, we definitely recommend you work with an accountant. 

Having an accountant is valuable beyond just compliance and tax planning—it’s about having someone by your side with the experience to help you make the big decisions and build a better business.

Coconut also makes it really easy for you to collaborate with your accountant. Once you've invited yours through the app, they'll be able to view your business activity and bookkeeping data whenever they need to.

In summary

At the end of the day: if you’re self-employed and earning more than £1,000, you’re going to need to fill in a tax return. 

And as we all know, life can be unexpected. So, you’re best off doing yours as early as you can, just in case something comes up. You’ve got from 6th April to 31st January to do your tax return, so try not to leave it until the last minute (Coconut can help you with that!).

But, if something bad does happen, let HMRC know. And make sure you get it to them as soon as you can once the issue is resolved.

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