The deadline for filing paper self-assessment income tax forms is the 31st of October and anyone who is unsure of how to complete their form may want to get visit a contractor accountant for help when they learn that the penalty for late filing could be as high as £1,600, even if no tax is due!
HMRC has implemented a new regime of stiffer penalties to encourage nearly 10 million people to submit their return on time.
Online returns must be filed no later than the 31st January and anyone who has not filed by that date will receive an automatic fine of £100. If the form remains unfiled after 3 months, there will be an additional penalty of £10 per day for up to 90 days.
Once a form is six months overdue, there will be a flat fine of the higher amount of £300 or 5% of the overdue tax. This penalty will be repeated if the return is still unfiled after 12 months, but HMRC says that if the case is “serious”, the fine could be 100% of the tax owed instead.
When you take all the penalties into consideration, a taxpayer could be fined £1,600 for submitting a return more than 12 months late.
In an important change to the previous system, fines will still be valid even if the taxpayer does not owe the Revenue any money. The important thing is to file the return even if you know all your income tax has been paid.