Penalty Notices for late Self Assessment Tax Returns

The taxman is sending  out 850,000 penalty notices to people who did not send in their 2011 Self Assessment Tax Returns on time, over the next fortnight.

The initial penalty is £100.  Anyone who still hasn’t sent their return risks further penalties.   If tax return is more than three months late the penalty will be an additional £10 for each day it remains outstanding, up to a maximum of 90 days (i.e. £900).  After that the penalties become even more severe and are based on a percentage of the tax unpaid.

Although the deadline for receiving online returns was 31 January, this year HMRC is not issuing penalties to people who sent their 2010/11 return online on 1 or 2 February, following strike action at HMRC’s call centres on 31 January.

People who get a late-filing penalty can appeal against it if they think they have a reasonable excuse for not sending back their tax return in time, or they think a penalty should not have been issued for any other reason.  Appeals should be made in writing by 31 March.  The taxman says: “Examples of a reasonable excuse could include a family illness or bereavement, or a delay in HMRC sending out an online activation code”.   Late appeals received after 31 March will be considered, if you can show that you had a reasonable excuse for missing this deadline.  Also, under a new initiative, HMRC has confirmed that anyone who receives a penalty, but who believes they don’t need to be in the Self Assessment system, can contact them.  If the taxman agrees, the return and therefore the penalty will be cancelled.

What does it mean for me?
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 3 months, additional daily penalties of £10 per day, up to a maximum of £900;
  • after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
  • after 12 months, another 5% or £300 charge, whichever is greater.
  • There are also additional new penalties for paying late of: 5% of the tax unpaid at: 30 days; 6 months; and 12 months (i.e. up to 15%, plus the daily penalties).

Will Lynam Tax Investigation Experts Help Me?
If you are undergoing a tax investigation, or have tax irregularities which you would like to disclose to HMRC – so as to regularise your affairs and avoid prosecution, then Lynam Tax Enquiry Experts can help you.
*For an initially free and wholly confidential discussion: phone Paul Lynam now on 0845 643 9997