FSB calls for Revenue to be more lenient on tax return late filers

With just one week to go until the tax return deadline, the Federation of Small Businesses has called on the Inland Revenue to be more lenient towards late filing of around half a million self assessment tax forms.

Currently, the tax man expects people to have completed the majority of their return by now – so even getting struck by lightning on the 30th, or getting hit by a bus, and living to tell the tale, is unlikely to be accepted as a reasonable excuse.

It is estimated that 10% of the 4.5 million small businesses in the UK will not submit their self assessment tax return form by the 31st January deadline. In 2005-2006, this equated to £84 million in fines.

If people get their tax form in one month after the fine is issued, the Inland Revenue can start adding a 5% surcharge on any outstanding tax, plus commercial interest. After that, the tax man can estimate your tax liability, which is unlikely to be in your favour.

With many still recovering from last year’s flooding, worries over Capital Gains Tax liabilities, and the credit crunch, the FSB say that these fines are an unnecessary burden on the nation’s small businesses.