New Penalty regime for late filing and payment of Self Assessment Income Tax

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 late5% of tax outstanding
More than 6 months late: 10%6 months lateFurther 5% added, so now 10% of tax outstanding
 12 months lateIncreases 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.