HMRC Amnesty on late Self Assessment Tax Returns

Why do some people not file a tax return?

There are many reasons why the self-employed or someone earning money from rental or investment income might not have submitted their self-assessment tax return for 2022–23 when it was due, in January 2024. First, there are those people whose tax affairs are in such a mess that they haven’t submitted a tax return or paid tax for several years before this, because they can’t face the prospect of getting their tax affairs in order, only a minority of these are guilty of tax avoidance.

The more usual reason for not filing a tax on time is:

• The person didn’t realise that they needed to fill one in;
• The person has not kept adequate records of income from self-employed work, investments, or rental income;
• The person doesn’t know how to fill in or file a tax return, and rather than pay an accountant to do it for them, they have buried their heads in the sand.

Why do some people pay the tax due and not file a tax return?

Some people have paid the tax due but have not yet submitted their tax return for 2022–23, why? Again, this is mainly due to lack of knowledge; maybe they did not realise that they needed to fill in and file a tax return for investments or income on property, for example, or were put off at the prospect because they did not understand how to do it. It’s surprising how many people don’t realise that it is a legal requirement to submit a tax return –whether or not the tax has been paid – for any income that has not been taxed at source or declared through a business.

The HMRC Amnesty: does this mean there will be no penalty due?

No, unfortunately not, even people that come clean and voluntarily submit a self-assessment tax return to HMRC by October 2024 will still have to pay:

• Any tax owed;
• The accumulated interest on it;
• The fixed penalties for the late submission of self-assessment returns; and
• The surcharges for the late payment of the tax owed, if they are already within the self-assessment system.

But, the hefty penalties geared towards the tax payable will be mitigated once the person has come clean.

What’s the incentive than?

Peace of mind is the real benefit. As pointed out, HMRC is not offering any huge incentive to take advantage of the amnesty, but those that do so will find that although they won’t be saved from fixed penalties, it may be possible to negotiate payment terms.

What should you do if you are one of the hunted?

Among existing dns clients we are confident that there is no need to worry, but if you are reading this and for any reason are concerned that you might fall among the group HMRC is targeting, contact dns today without delay and we can help you wipe the slate clean and negotiate with HMRC on your behalf.

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About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.