HMRC has now started to issue taxpayers with notices of the new Self Assessment penalties for late filing and late payment of tax, and as Mike Scott of HSJ accountants warns these have risen significantly.
The old fines are to be replaced because, as HMRC says, the previous penalty rate was not enough of a deterrent.
The new penalty regime for late filing and late payment of self assessment income tax started in April 2011 and will apply to the tax year 2010/11.
The new penalties for filing Self Assessment Tax Returns late are:
PREVIOUS FINES | NEW PENALTIES FOR APRIL 2010/11 TAX YEAR | |
| Overdue by | Penalty |
Lower of £100 or tax due | One day late | Automatic £100 fine, even when no tax outstanding |
| 3 months | Up to £10 per day (maximum 90 days) |
Lower of £200 and tax due | 6 months late | 5 % of the outstanding tax, or £300 if greater, in addition to previous penalties |
£200 + up to 100% of the tax outstanding | 12 months late | Increases by 5% to 15% of tax due, of £300 if greater |
| More than 12 months late | Up to 70% of tax outstanding, or £300 if greater |
The new penalties for late payment of tax are:
PREVIOUS FINES | NEW PENALTIES FOR APRIL 2010/11 TAX YEAR | |
Overdue by | Penalty | |
| More than 28 days late: 5% | 30 days late | 5% of tax outstanding |
| More than 6 months late: 10% | 6 months late | Further 5% added, so now 10% of tax outstanding |
| 12 months late | Increases by another 5% to 15% of tax outstanding | |
These penalties are on top of the interest that HMRC will charge on all outstanding amounts, including unpaid penalties, until the payment is received.
If you are concerned with the new penalty regime or want more information and advice please do not hesitate to speak to us on 0845 365 1000, or email us at help@hsj.uk.com.