The penalties just keep going up!
6 April 2011
H M Revenue & Customs has issued a reminder that the new penalty regime for late filing and late payment of Income Tax Self Assessment Tax Returns starts shortly.
The new penalty regime for 2010/11 returns will be:
Late filing penalties:
When any return is late, an initial £100 fixed penalty arises the day after the filing date. Unlike before, this now applies even if there is no tax to pay or the tax due has been paid on time.
Individuals are notified they will be liable for a further delay penalty if the return is not submitted within 3 months of the filing date. The penalty is calculated at £10 per day, until the return is filed, for a maximum of 90 days (up to £900).
After the daily penalties, and if the return is still outstanding 6 months after the filing date, a further penalty arises, calculated at 5% of the tax liability on the return or £300 if this is higher.
Where the return is still outstanding after 12 months, a further penalty arises, calcuated at 5% of the tax liability on the return or £300 if this is higher.
If a determination has been made because the return has not been received, the penalties at 6 and 12 months will be based upon the estimated amount in the determination, and then adjusted retrospectively when the self-assessed amount is returned.
It doesn't stop there!
Late payment penalties:
At 30 days, there will be charged an intial penalty of 5% of the tax unpaid at that date.
At 6 months late, there will be charged a further penalty of 5% of the tax that is still unpaid.
At 12 months late, there will be charged a further penalty of 5% of the tax that is still unpaid.
These penalties are additional to the interest that will also be charged on all outstanding amounts, including unpaid penalties, until payment is received.
As an example, under this new system, taxpayers who have not filed their return within 6 months of the filing date will face a minimum penalty of £1,300, even if they do not owe any tax!
Take note, and spread the word!
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