Sole traders and partnerships across the West Midlands have been warned they will face HMRC’s new penalty system if they fail to meet this month’s deadline for submitting online self-assessment tax returns.

The alert comes from Midland tax accountant Anita Stewart who is concerned thousands of small businesses across the region face paying inflated fines for filing their paperwork after the 31 January cut-off.


Under the HMRC’s penalty system, those who file their tax return after the January deadline will now face an automatic £100 fine, even if no tax is due. In some cases levies could stretch to £1,300.


Ms Stewart, partner at Midland-based DHJH Chartered Accountants, said: “With last October’s deadline for paper self-assessments now a distant memory, the only route the region’s small businesses now have is to submit their returns electronically through the HMRC website, or alternatively use specialist tax software which some accountancy firms can access.


“The 31 January HRMC deadline is approaching ever closer so with the festive period now at an end it’s vital, especially for the region’s small businesses, to set time aside in the days and weeks ahead to understand and untangle their paperwork.


“HMRC’s complicated penalty framework means the cut-off date is especially important this year as it’s clear many firms have ignored the recently introduced system. It’s a snub, although unintentional by most, which could prove extremely costly.


“In a nutshell, the longer sole traders or partnerships delay their returns, the more they will have to pay as there are mounting late-filing penalties after three, six and twelve months. It’s a severe new framework which could see some paying up to £1,300 in fines – with those not even owing any tax possibly being landed with a £100 penalty.”


Ms Stewart, a respected tax advisor to many businesses across Birmingham and the Black Country, added: “With our unstable economy forming an uncertain picture for many small businesses here in the Midlands, failure to meet the 31 January deadline will add unnecessary pressure onto finances at a time when they least need it.”


Ms Stewart said that it’s widely accepted that the tax body’s new-look penalty system is here to stay. She added that HMRC will continue to target non-filers through reminder letters and government-led marketing campaigns and warned taxpayers they will ‘stop at nothing’ to claw back the money they are owed.


She has advised the region’s sole traders and partnerships to seek professional financial advice if they need to be guided through the online submission process – a service DHJH specialise in through their access to a bespoke software package.




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