SELF-ASSESSMENT – PENALTIES SIGNIFCANTLY INCREASED

Under the previous rules the penalty for late submission of your tax return was £100. However if you tax liability was less than £100 then your penalty was capped at this level i.e. no tax due no penalty.

HMRC have said that this was not enough of a deterrent and therefore a new penalty regime has been announced for the 2010/11 tax year.

 

If your tax return is filed late the new penalties are:

 

Day one – initial penalty of £100 will be charged regardless of the tax owed or tax paid on account.

3 months late – an automatic penalty of £10 per day, up to a maximum of £900.

 

6 months late – further penalties will be charged, which are the greatest of 5% of the tax due or £300.

12 months late – more penalties, which are the greatest of 5% of tax due or £300.

 

In the most serious of cases HMRC will look to impose a penalty of up to 100% of the tax due.

 

Penalties for paying your tax late are:

 

30 days late – an initial penalty of 5% of the tax unpaid at that date.

 

6 months late – a further penalty of 5% of the tax that is still unpaid.

 

12 months late – a further penalty of 5% of the tax that is still unpaid.

 

The message really is to ensure that your 2010/11 tax return is filed well in advance of the 31 January 2012 deadline.

 

For individuals who have not been issued with a tax return to complete, it is important to remember that it is your legal responsibility to advise HMRC of any tax owed.

 

DO NOT WAIT FOR HMRC TO CONTACT YOU!!