Although a large majority of taxpayers have switched to online filing for their self-assessment tax returns in recent years, paper returns are still popular among some generations. Paper returns are also likely to be particularly popular for 2016/17 due to recent delays in the rollout of Making Tax Digital (MTD), and some distrust in the accuracy of HMRC’s online software, which has led to correct returns being wrongly rejected by HMRC.
Paper returns need to reach HMRC by 31 October each year, with calculations for the tax year ending on the preceding 5 April. We recommend that paper returns are sent immediately for 2016/17, as unfortunately for late filers, harsh and cumulative penalties are charged by HMRC:
· Immediate penalty - £100
· Penalty after 3 months - £10 per day, up to £900
· Penalties after 6 and 12 months – 5% of your tax liability, at a minimum of £300