New penalties for late tax returns
Tough new rules. For several years the Taxman has been threatening to tighten the rules on late self-assessment returns and we knew there was a change coming this April, but the new fines are on an unprecedented scale. As official statistics show that over 10% of tax returns are filed late, the new penalties might be a real money spinner for the Taxman.
Penalty hike. For 2010/11 penalties will be payable where you submit your tax return on paper after October 31 2011 or online after January 31 2012. If you’re late by up to three months the penalty is a flat £100. For each subsequent day you’ll be charged £10 for the next 90 days, i.e. £900. And if you still haven’t sent in your return by July 31 2012 you’ll have to pay another £300 or 5% of any tax you owe for 2010/11, whichever is the greater. This equates to a minimum fine of £1,300 which is 550% more than the £200 penalty payable under the old rules.
Trap. Unlike earlier years you’ll be charged a penalty even where you’ve paid all the tax due as shown by your self-assessment form on time, i.e. by January 31 following the end of the tax year in question.
Countdown begins. It’s a fact of life that things often take more time than expected and with the first tax return deadline a little over six months away our first recommendation is that you register for online filing now (see The next step). This will extend the deadline for your 2010/11 return form until January 31 2012. But if that’s not enough, there’s more you can do.
Tip. If you’re running against the deadline and don’t have all the information, include estimated figures and tick the “estimates included” box on the form. You’ll also need to enter details of the estimates in the additional information section.
For how to register for online self-assessment, visit http://tax.indicator.co.uk (TX 11.14.01).
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