Around half a million people who have not yet submitted 2010/11 tax returns to HM Revenue & Customs (HMRC) are now receiving additional penalty letters.

The number of outstanding returns almost halved in 2012, falling to 5.9 per cent of those due compared to 10.7 per cent in 2011. As a result, 518,000 fewer penalties are being issued.

New, higher penalties were introduced in April 2011 to increase the incentive to file. Letters began going out on 14 August to notify taxpayers who failed to meet the 31 January deadline for online returns that they must pay a minimum £1,200 penalty, made up of

  • the maximum £900 in daily penalties for non-filing
  • a further late-filing penalty of £300 or five per cent of the tax due, whichever is higher.

People who receive a late filing penalty can appeal if they think they have a reasonable excuse for not sending their tax return, such as a family bereavement.

Anyone who has received a late filing penalty and has not sent in a return, but thinks they do not need to be in self assessment, can still potentially apply to be taken out of the regime. If HMRC agrees, the return and any penalty will be cancelled.

The penalties being issued over the next few weeks are in addition to £100 late filing penalties for missing the 31 January filing deadline, which were sent out in late February and early March.

The new penalty regime for late self assessment returns are:

  • one day late: a penalty of £100, even if there is no tax to pay or tax due has been paid
  • three months late: £10 for each following day – up to a 90-day maximum of £900. This is in addition to the fixed penalty above
  • six months late: £300 or five per cent of the tax due, whichever is the higher. This is as well as the penalties above
  • 12 months late: £300 or five per cent of the tax due, whichever is the higher. This is in addition to as the penalties above.

Link:   HMRC tax return deadlines and penalties

Ashby Berry Coulsons is the trading name of Ashby Berry Coulsons Ltd. Registered in England & Wales, Company registered number 07945386.
Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales.
Registered office 2 Belgrave Crescent, Scarborough.