We are all used to the idea that if you are late filing your self assessment tax return the penalty is fixed at £100.
From 6 April 2011 a series of late filing penalties apply. So if you are late in filing your 2010/11 return (latest date for electronic filing is 31 January 2012) these are the penalties you will face.
- Returns filed one day late: penalty of £100
- Returns filed more than three months late: £10 per day, up to a maximum of £900
- Returns filed more than six months late: £300 or 5% of the tax due, whichever is the higher.
- Returns filed more than twelve months late: £300 or 5% of the tax due, whichever is the higher.
These penalties are cumulative; for example, if you file a return six and a half months after the due date, the total penalties due will be £1,000 plus the higher of £300 or 5% of the tax due.
This demonstrates that even if the 31 January filing date has been missed it is still beneficial to submit the return as soon as possible after the due date in order to reduce the amount of penalties levied.