Self-Assessment Update – Revision to penalties for late returns and payments

Tax Comments Off on Self-Assessment Update – Revision to penalties for late returns and payments

The system of penalties has been amended for late filing of personal, trust and partnership returns, and late payment penalties relating to tax years 5 April 2011, with effect from 6 April 2011.

Late Returns:

The basic penalty for late filing of a return will be £100.  There will no long be any reduction to this to give if the tax due is a lower figure.

The penalties for late filing are summarised as follows:

  • £100 immediately after the due date for filing (whether or not the tax has been paid).
  • Daily penalties of £10 per day for returns that are more than 3 months late – for a maximum of 90 days.
  •  Penalties of 5% of tax due for the return period (or £300 if greater) for prolonged failures, which arise after 6 months and again after 12 months.
  •  Where a person fails to file for more than 12 months after the due date, and has deliberately withheld information from HMRC, the higher penalty of 70% of tax due will apply.
  •  This will be increased to 100% if the failure is considered to be deliberate with concealment.

Late Payment:

The penalties and surcharges for late payment of tax are as follows:

  • Penalty of 5% of the amount of tax unpaid, generally 1 month after the payment due date (or at the filing date for the relevant return).
  • Further penalties of 5% of any amounts still unpaid at 6 months and 12 months

Please note that any late payment penalties are suspended where the taxpayer has agreed a ‘time to pay’ arrangement.

A higher level of penalties will be applied where the taxpayer has been involved in offshore tax evasion.

If you have any concerns about your tax affairs or if you would like to consider us in the preparation and submission of your annual Self Assessment tax returns please do give me a call.

Sue Stephens

Tax Manager