The stiffer penalties, which come into force this autumn, will relate to Self Assessment returns filed for the 2010/11 tax year and all subsequent years.
New penalties for late filing of self assessment tax returns
The revised penalties for late Self Assessment returns are as follows:
- 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
- After 12 months, another 5% or £300 charge, whichever is greater.
In serious cases, if the tax return is more than 12 months late, under the new regime taxpayers could face a penalty of up to 100% of the tax due.
New penalties for late paying of tax due
As well as new penalties for late filing, those for the late payment of tax are also being strengthened. The new rules, will result in penalties equating to 5% of the tax unpaid after 30 days, 6 months and 12 months.
In addition to the penalty charges, interest will also be levied. The interest rate currently charged for late payments is 3%.
Filing and payment deadlines are unchanged
The tax return filing and payment deadlines remain unchanged. If you file a paper self assessment return you will need to submit it by 31 October. Whereas, if you do an online return you have an extra 3 months in which to file it before the 31 January deadline. This is also the deadline for you to pay any tax due by.
Excuses for missing the deadline
In certain circumstances, HMRC may waive a penalty if you have a ‘reasonable’ excuse for missing the deadline. HMRC list some events that may be considered as a reasonable excuse;
- Documents lost through theft, fire or flood that you can’t replace in time
- Life-threatening illness, for example a heart attack that prevents you dealing with your tax affairs
- Death of a partner shortly before the deadline
- Industrial action by Royal Mail over a lengthy period of time
- Issues with the online service, with no work-round.
If any of these apply to you, you should write to HMRC as soon as possible. The dog ate my return doesn’t make the list!