This is a simple question for those who know the answer but I am new to tax and I am only used to the new rules.

Can anyone tell me the penalties & surcharges etc for late filing and late payment for Tax Returns y/e 2008, 2009 & 2010.

Thanks

12th Apr 2012 14:45

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It depends

The rules changed after the 09/10 return.

Have a look at the following link as a guide.

http://www.hmrc.gov.uk/sa/late-return-pens.htm

Under the old rules if there was a refund or no tax due, then the fines & interest charges are quashed.

thanks

i have 4 TRs outstanding 2008, 09, 10 & 11.

there is a tax liability for all years but 2011, sods law that the year with no liability is the one of new rules.

i know about the 2 fixed penalties of £100. i just dont know the interest and surcharge.

interest starts accruing 1 day after payment is due, so for 2008 this is 1 feb 2009. is that correct? how much is the interest, 3%?

i cant find anything online for interest & surcharges, only fixed penalties which are pretty simple.

Interest

Current rate is 3.0% from 29/9/2009

http://www.hmrc.gov.uk/rates/interest.htm

For previous rates, see

http://www.hmrc.gov.uk/rates/interest-late.htm#itnic

so if i had a 2008 TR with a tax liability of say £1,000, i would have 2x £100 penalties and interest accruing from 1 feb 2009 to say 30 apr 2012 of 3.5% (the interest rate on 1 feb 2009), so total penalties would be £235 for one year and more interest for the following years. is that correct?

thank you for your help.

Not quite

You would have £200 of late filing penalties, £35 of interest for one year (the rate is 3% per annum!) , so by now you would have accrued around £110 of interest in respect of the 2008 liability.

In addition you would have a 5% late payment surcharge falling due on each of 28 feb 2009 and 31 July 2009.

I assume that you were issued with a tax reurn for this year? If you were not you could be looking at a significantly stiffer additional penalty (up to the level of the tax not paid on time) for failure to notify HMRC of the need to submit a return.

of course got mixed up with my workings.thank you for the clarification.

HMRC have contacted me regarding the need to complete the 4 previous tax returns so although i have not yet received a notice i am assuming i will receive a tax return in due course.

just to make sure the 5% surcharge is just on the tax liability. or is it was is due at that time? for example 28 feb i will have £1,100 outstanding.

for 2008 i will have the following penalties etc.

tax liability - 1,000

late filing penalty. (01 feb) 100

5% surcharge (28 feb) 50

late filing penalty (31 jul) 100

5% surcharge (31 jul) 50

3% interest 30

total 1,330

i have only calculated the interest for a one year just to make it simple.

If I were you I would speak to a tax adviser

as you could be looking at a failure to notify penalty as well. As mentioned in my previous post there was a requirement to notify HMRC by October 2008 if you had not been issued with a tax return and had a liability for the 2008 tax year.

If you did not do this then you are potentially facing a penalty of up to 100% of the tax not paid by 31 January 2009 (this is normally mitigated down but the fact that you have been "contacted" does not bode well for the extent of the mitigation).

This non-notification penalty is in addition to the late filing and late payment surcharges.

Had HMRC previously asked for returns

and you had not done the, or have they only just asked for the returns?

If the latter then the filing and payment due date is three months from the notice requiring the returns by HMRC.

Of course there may still be late notification penalties, which is a seperate matter

i have a letter from sept 11 to say they are overdue so i wont have failure to notify penalties.

does the interest and surcharge include PoA?

interest on surcharges and penalties

Not sure if you have grasped this from the above but interest also runs on surcharges and penalties and the due dates for interest are from dates payments on account would have been due.

I would get the returns in and wait for the statement!

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Out of curiousity

Why do you have tax to pay for the earlier years?

As in, did you have rental income undeclared, a self employment?

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