HM Revenue & Customs has
announced a new penalties regime for the late filing of Self Assessment tax
returns and the late payment of tax from April 2011.
Since the introduction of Self Assessment
the penalty for the late submission of a return was £100. This was reduced to
nil if the taxpayer had no tax liability for the year in question or the tax
was paid by the due date. Many taxpayers did not see this as much of a
deterrent.
From April the penalties will
increase considerably. Even if your return is one day late a penalty of £100
will be levied, regardless of the fact that you may have no tax liability for
the year. If you are three months late you will be charged an automatic daily
penalty, up to a maximum of £900.
For taxpayers that have still not
submitted their return after six months, further penalties in addition to the
above amounts will be charged, which could be as much as a further 5% of the tax due for the year. If your return
is twelve months late and the Revenue consider it to be a serious case, you
could be charged up to 100% of your tax liability as a penalty.
In addition to the above, HMRC
will also penalise you for late payment of your tax. Interest charges will
accrue on a daily basis and penalties of up to 15% will also apply, depending
upon how late the tax payment is.
Please contact us if you feel
that you may be late with filing your tax return or paying your tax. We can
then try and resolve the position for you as quickly as possible, with a view
to mitigating penalties and interest charges that may be payable.
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