The ICAEW have reported that HMRC will not charge the daily penalties where the 2019 Self-Assessment Tax Return is filed late.
Normally, when a Self-Assessment Tax Return is submitted to HM Revenue and Customs after the filing deadline there are a series of escalating penalties. Where the SATR is late by even 1 day there is a fixed “initial” £100 penalty. Where it is more than three months late “daily” late filing penalties, at £10 per day, are charged – for a maximum of 90 days (i.e. £100 + £900).
At 6 months late “tax related” penalties are charged – at the higher of 5% of the tax due or £300. And at 12 months late there is a further tax related penalty of the greater of 5% of the tax due or £300. These tax-geared penalties are in addition to the initial and daily penalties. Where a tax return is filed late deliberately: there can be much higher tax geared penalties: going up to 100% of the tax due.
Penalties are not charged where the taxpayer has a “reasonable excuse” for filing late: and then sends in the return soon after.
What does this mean for me?
There is some good news. HMRC have said that taxpayers who were late in filing their 2019 Return will not be charged daily penalties: effectively treating COVID-19 as being a reasonable excuse for the late filing during that period. Whether that will be extended to cover the tax-geared penalties remains to be seen.
How can Lynam Tax Enquiry Experts help me get a lower penalty?
Lynam Tax specialists are experts in tax penalty negotiations. We have over 90 years’ of experience in negotiating tax penalty levels, and can use our expertise to substantially reduce, and sometimes eliminate, the penalties that the tax inspector is demanding. We have helped hundreds of taxpayers achieve substantially lower penalties than those first sought by the taxman; including zero penalties in many cases.
For a free initial consultation call today:
Paul Lynam: 0845 643 9997
Andrew Nutbrown: 0771 877 8710