Late Return Penalty Notice-£1300 for 2011/2012

Late Return Penalty Notice-£1300 for 2011/2012

Didn't find your answer?

Having received a few Late Return Penalty notices for year end 2010 this week, I was about to pass them on so the client could be chased up when I noticed the following:

From April 2011 penalties are changing,if you send us your tax return six months late next year you will be charged penalties of £1300, even if you have no tax to pay or you have paid all the tax you owe.

Wow! when was that announced, seema a bit harsh if you have no tax to pay or paid your tax

Replies (21)

Please login or register to join the discussion.

avatar
By DILBERT11
17th Aug 2011 12:16

Late Submissions

For the year 2010-11 the £100 penalty applies whether tax is due or not.  If the return is more than three months late there is a daily penalty up to a maximum of £900 on top of the initial £100.

After six months there is a further fine which is larger of £300 or five per cent of the tax due.

For example, SA return due 31 January 2012 but filed in September 2012 would attract penalties of at least £1,300 even if no tax is due or there is a refund.

Also, those who plan to move to online filing when they previously did a paper return and do not tell the Revenue before the October deadline will be fined if the don't send in a paper return by 31 October.

Penalties were announced last year so we had plenty warning.

Thanks (0)
Replying to steve.oldham:
Rebecca Benneyworth profile image
By Rebecca Benneyworth
17th Aug 2011 12:40

Paper move to online filing

Where did the comment about filing on paper normally and then being fined after 31 October come from???

The law states that the due date for the return is 31 January if filed online and 31 October if filed on paper. The only way a penalty can be due before 31 January is if a return is actually filed on paper after 31 October. There is no requirement to inform HMRC whether one will file online or on paper, so there is in my view no possibility of a fine in the circumstances you describe. Unless I have missed something major?

Thanks (2)
Replying to steve.oldham:
avatar
By User deleted
24th Aug 2011 13:34

Grrr!

DILBERT11 wrote:

Penalties were announced last year so we had plenty warning.

 

However, just because they told us, don't make it right/fair/just etc!

Life is hard enough for many clients at the moment, running around getting information together to send a message to HMRC telling them you do not owe them anything is not at the top of your list when you are busting a gut trying to feed, clothe and home your family. Do you think the unfortunate ones who had their homes and businesses destroyed in the riots will have reasonable excuse?

 

 

Thanks (0)
avatar
By occca
17th Aug 2011 12:37

Is this bit true?

'Also, those who plan to move to online filing when they previously did a paper return and do not tell the Revenue before the October deadline will be fined if the don't send in a paper return by 31 October.'

 

Have you got a link for this?

Thanks (0)
Euan's picture
By Euan MacLennan
17th Aug 2011 14:07

Paper to Online

The need to notify the switch is news to me also and I agree that there would be no legal basis for a penalty.  But that need not prevent HMRC from levying a penalty - as they always do on CT returns for an extended accounts period if the CT600 for the first 12 month CTAP is not submitted within 12 months after the 12 months, rather than 12 months after the new accounting date, which is the actual legal deadline.

Thanks (1)
avatar
By MarionMorrison
17th Aug 2011 14:37

Another puzzle

I've often wondered what happens if you file a paper return in November say, and then you realise what the rules are and file an identical Return online.  Is that penalisable?

Thanks (0)
Replying to JamieG:
avatar
By Andy3T
22nd Aug 2011 13:14

paper vs electronic, delays lead to an 'earlier' return.
Oddly if you file by paper on 1 November, and then file electronically on 2 November, according to HMRC you will still get a fine as the paper filing was late, the e-return which 'amended the filing' is irrelevant from a penalty perspective. This perception of lateness apparently holds despite the fact that the electronic return was filed on time and so if no paper return had been filed no penalty would have been due. I've had this reasoning explained to me by HMRC staff and come to the conclusion that they just want people to e-file...

There are two ways to look at this in my view in your situation, either you sit on the signed paper return until you can e-file it and then do so - even though the return will be received by HMRC at a later date it will be on time / 'less late' from a penalty perspective; or you trust that by the time the paper return gets processed the e-filing will have been occured and the paper version is then, by default, the 'amended version' - 6-8 weeks

Thanks (0)
Quack
By Constantly Confused
17th Aug 2011 14:36

It's funny

I knew the new rules, I even have them in front of me, I knew they were harsh.  But seeing it expressed as 'at least £1,300 for a tax neutral person' really brings it to the light...

Thanks (0)
avatar
By DILBERT11
17th Aug 2011 16:59

31 October: all paper returns
Got the info about telling the revenue if you intend switching from paper to online from an article in one of the Sunday business papers.  However I didn't actually state when the penalties would run from and quoting from HMRC website:

“If you send a paper tax return it must reach HMRC by midnight on 31 October."

I my view if they don't receive the paper return by midnight on the 31 Oct and there are no extenuating circumstances then you are in default and a penalty would be imposed.  My policy, as always, is better be safe than sorry.

 

 

Thanks (0)
By petersaxton
17th Aug 2011 21:21

My view

"I my view if they don't receive the paper return by midnight on the 31 Oct and there are no extenuating circumstances then you are in default and a penalty would be imposed.  My policy, as always, is better be safe than sorry."

I think your view is wrong. You would get a penalty if they received a paper return after 31 October. If you send a tax return online by 31 January there is no penalty.

Thanks (0)
avatar
By valentino rossi
18th Aug 2011 09:49

From a Sunday business paper

I believe that may be the reason for the misunderstanding.

 

Usual press scaremongering tactic.

Thanks (1)
Rebecca Benneyworth profile image
By Rebecca Benneyworth
18th Aug 2011 16:04

As usual
With any tax subject it's a case of
Lay Press = Have a guess
The standard of basic tax knowledge among journalists even in the more respected papers is utterly abysmal. Witness the conflation of "wrong PAYE codes" (largely not HMRC's error, and an issue which the department is getting MUCH better at dealing with thanks to NPS) with the report by Treasury select Committee which really is HMRC's problem. We can't have intelligent debate about important issues because the public are so ill informed - and I'm afraid that the BBC is just as culpable.

Thanks (1)
avatar
By DILBERT11
22nd Aug 2011 12:15

Late Returns
This direct from HMRC website -

 

"Important changes when filing paper tax returns

If your client misses the Self Assessment filing deadline this year they will be immediately liable for a £100 late filing penalty. The penalty will apply even if there is no liability or if any tax due is paid in full by 31 January 2012.

These new penalties will apply to all Self Assessment tax returns from 2010-11 onwards. The fixed £100 penalty for failing to file a tax return on or before the filing date will therefore apply to:

paper returns received on or after 1 November 2011online returns received on or after 1 February 2012

Daily penalties of £10 per day will also take effect if the tax return is still outstanding three months after the filing date. So if your client files a paper return after 31 October 2011, they will be liable to a daily penalty on 1 February 2012 - that's three months earlier than online filers. All the more reason to file their tax return online.  

 

Extenuating circumstances would occur if you only received a notice to file a return after 31 July"

Thanks (0)
avatar
By beverly chester
22nd Aug 2011 13:51

Special Cases

Does anyone know what the situation is with special cases? I have a client who is a Diplomat and cannot file on line - as in is not allowed to for confidentiality reasons - OK Don't go there I have already tried to get that one explained. 

Last year I was told that in that instance I could file a paper Return up to 31st January, not the October deadline, but it has just occurred to me that might have changed as well.

Client is "away" a lot so filing by October is not always an option. 

 

Thanks (0)
By righthandbat
22nd Aug 2011 15:02

special cases

exclusions such as diplomats still have dispensation to file on paper by 31 January.

Thanks (0)
avatar
By beverly chester
22nd Aug 2011 15:09

righthandbat

Thanks for that!

Thanks (0)
Rebecca Benneyworth profile image
By Rebecca Benneyworth
22nd Aug 2011 16:51

But it's wise

to accompany the return with a "reasonable excuse" form when you file it to save the silly "Raise a penalty" and the "Apeal the penalty" and then "Cancel the penalty" game. The form is at Reasonable excuse form

Thanks (0)
Morph
By kevinringer
24th Aug 2011 13:09

Penalty can be more than £1300 - but what about partnerships?

See http://www.hmrc.gov.uk/sa/deadlines-penalties.htm - combined penalty for 12 months late is a MINIMUM of £1600. If the tax bill is >£3k then the penalty will be larger. But I have my own question - what about partnerships? I've spoken to HMRC to ask what the new penalty will be for a late partnership return - will it be the same as an individual, or will the £300 be fixed and not 5% of tax? HMRC haven't been able to answer. Does anyone know?

Thanks (0)
avatar
By DILBERT11
24th Aug 2011 14:26

Late Returns

kevinringer raised the question of partnership returns and whether it would be the same penalty as an individual.

Off the top of my head, and I could be proved wrong, I would think that the penalties would apply to each return.  This means there would be a minimum of three penalties imposed on the partnership and the partners.

As to the businesses and homes destroyed in the roits, if their records have also been destroyed then I am sure it would be viewed as reasonable excuse and each case would be looked at on its merits.  However, filling in a tax return is part and parcel of running a business and as accountants we should be doing all we can to help them file their returns on time even though they are 'busting a gut'.  

Thanks (0)
Replying to DuaneJAckson:
Quack
By Constantly Confused
24th Aug 2011 15:56

.

DILBERT11 wrote:

kevinringer raised the question of partnership returns and whether it would be the same penalty as an individual.

Off the top of my head, and I could be proved wrong, I would think that the penalties would apply to each return.  This means there would be a minimum of three penalties imposed on the partnership and the partners.

As to the businesses and homes destroyed in the roits, if their records have also been destroyed then I am sure it would be viewed as reasonable excuse and each case would be looked at on its merits.  However, filling in a tax return is part and parcel of running a business and as accountants we should be doing all we can to help them file their returns on time even though they are 'busting a gut'.  

 

Ye Gods, we used to have a partnership where one partner held the entire thing up and it sometimes wasn't in till March/April.  It had 8 partners, so we'd be talking 9 x £500ish 4 and a half grand in penalties!

 

Bet that partnership pulls its finger out this year...

Thanks (0)
avatar
By User deleted
24th Aug 2011 14:40

So whats the heads up ...

... on sticking in an estimated return and then substantiating later - given we can't produce a return if we have no figures/paperwork.

All this does is heap even more pressure on accountants, we at least used to be able to leave ones with nil liabilities until last, knowing we could slap them in in February with no worries if necessary.

I know it is the tax payers responsibility to get the information to us blah blah blah, but, in the real world all clients are equally important and as beneficial or dangerous too us as each other when we get it right, or wrong (or more specifically, are perceived by the client to get it wrong). As successful practices are built on trust and referrals you only need to p**s off one "waste of space" client who knows too many of the A1 clients to find yourself with problems, even if it is just firefighting - we all have better things to do than that! 

 

Thanks (0)