Carl Mills Accountants Cheadle

We have a range of services for different industry sectors including services for Medical Practitioners, Care Homes and the property industry

Welcome to Carl Mills Accountants

Whatever your needs, we are here to help Carl Mills Accountants is a firm of Accountants based in Cheadle, Cheshire offering accounts, taxation and business advisory and support services to a wide range of businesses and individuals

Tailored advice services to help you get your business up and running

We offer a complete range of compliance services for your business

Working closely with both individuals and businesses to ensure the minimum tax required by law is paid

The current hot topic

A key issue in a recent high profile tax dispute centred around a penalty issued by HMRC for an error that was described as ‘careless and not deliberate’ This phrase has caused many to ask questions about how HMRC categorise mistakes on tax returns and when penalties and interest payments might apply Here we explain some of the terms used and take a look at the self assessment process

A plain English reading of the phrase ‘careless and not deliberate’ implies a simple error was made However, UK tax law is more complicated, and the phrase is more likely a designation settled on by HMRC if it concludes it cannot prove deliberate behaviour

A more thorough explanation was later given by HMRC’s Chief Executive Jim Harra, who appeared before MPs on the Public Accounts Committee in Parliament

Harra said: ‘There are no penalties for innocent errors in your tax affairs If you take reasonable care, but nevertheless make a mistake, whilst you will be liable for the tax, and for interest … you would not be liable for a penalty

‘But if your error was as a result of carelessness, then legislation says that a penalty could apply in those circumstances ” ‘Carelessness is a concept in tax law It can be relevant to how many back years that we can assess, can be relevant to whether someone is liable to a penalty and if so, what penalty they will be liable to for an error in their tax affairs ’ While these words will come as a relief to many it is still vital that care is taken to file tax returns in a timely and accurate manner

Tax returns are issued shortly after the end of the fiscal year Tax returns are issued to all those whom HMRC are aware need a return including all those who are self-employed or company directors

This year saw a record 11 7 million self assessment taxpayers submitted their returns by the 31 January deadline

Those individuals who complete returns online are sent a notice advising them that a tax return is due If a taxpayer is not issued with a tax return but has tax due they should notify HMRC who may then issue a return

If you are not asked to complete a tax return, it remains your responsibility to advise HMRC if there is a new source of untaxed income, a capital profit that could lead to a tax liability or your savings or dividend income is significant enough to result in tax being payable at the basic, higher or additional rates of tax

Self assessment (SA) timetable

• Income tax and capital gains tax are both assessed for a tax year which runs from 6 April to the following 5 April
• Shortly after 5 April - SA returns or a notice to complete a return are issued by HMRC
• 31 October following - non-electronic returns need to be submitted to HMRC by this date
• 31 January following - final date for submission of the return and all outstanding tax to be paid

Late filing penalties apply for personal tax returns as follows: £100* penalty immediately after the due date for filing (even if there is no tax to pay or the tax due has already been paid)

• The full penalty of £100 will always be due if your return is filed late even if there is no tax outstanding

Additional penalties can be charged as follows:

• over 3 months late - a £10 daily penalty up to a maximum of £900
• over 6 months late - an additional £300 or 5% of the tax due if higher