Many people cutting HMRC tax deadline fine
A recent report from online cloud accountancy, Boox, revealed there is a frightening lack of financial awareness amongst many workers who will be facing two long days trying to file their returns on time. It found:
· 20 million British workers don’t know how much tax they pay
· 36% of UK workers don’t understand the current rate of VAT
· 59% don’t know the salary level at which 20% tax rate is payable
· Only 1 in 10 know the percentage of their salary that goes towards NI contributions
An infogrpahic on the main findings can be found here too.
Many self-employed and freelance workers are also facing similar stress when filing their returns.
As seen by the most recent ONS figures, the UK’s self-employed and freelance workers have risen by 147,000 since June-November of last year. This means now the UK has 4.3 million self-employed workers. The Boox report also found that these workers are similarly unaware of their tax obligations as other UK workers. It found:
33% of freelancers are not aware of the current VAT rate
Nearly two thirds (64%) either don’t know or incorrectly guessed the salary level at which the 20% tax rate is payable
More than nine in ten do not know the percentage rate of Class 4 NICs payable on taxable profit
For all the workers struggling to file their returns, stiff fines await them.
Workers who miss the deadline face a £100 penalty and HMRC dished out fines to 850,000 people in 2012, incurring £85million in penalties. If workers miss the 31st January deadline, the fine will be £10 per day for the next 90 days. This means if a worker is three months late in filing and even if they owe no tax they’ll have to pay a fine of £1,000.