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Alert on new tax return penalties

16th Sep 2011
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The taxman has reminded individuals and businesses about new tougher self-assessment penalties for late returns and late payments that come into effect this autumn.

The changes will affect self assessment returns for 2010/11. The deadlines for returns are unchanged -- October 31 for paper returns and 31 January for online returns. The deadline for paying tax due is still 31 January.

The new penalties for late Self Assessment returns are:

  •     An initial £100 fixed penalty, which will now apply even if there is no tax to pay, or if the tax due is paid on time;
  •     After three months, additional daily penalties of £10 per day, up to a maximum of £900;
  •     After six months, a further penalty of 5% of the tax due or £300 whichever is greater
  •     After one year, another 5% or £300 charge -- whichever is greater. In serious cases the penalty after 12 months can be up to 100% of the tax due.

New penalties for paying late are 5% of the tax unpaid and will be applied at 30 days, six months, and 12 months. Interest will also be charged on top of these penalties.

Someone whose tax return is due on 31 January 2012, but which HMRC doesn’t receive it until 5 August 2012 would be over six months late, explains HMRC in an online example. The person would then have to pay a £100 fixed penalty; a £900 penalty (£10 each day from 1 May to 29 July, when the maximum 90 day penalty is reached); and £300 or 5% cent of the tax due - whichever is the higher.

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23rd Jan 2012 13:09

previous years

What penalties will apply to unsubmitted 2010 returns?

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