As of the new tax year, which began on 6th April, HMRC are increasing the penalties for late tax returns and late payment of overdue tax. Delay and you’ll be made to pay, is the stance HRMC are taking as these new penalties increase over time. The old £100 penalty was not a big enough deterrent so they have decided to get tough.
The new penalties are outlined below.
If you file your return late the penalties are as follows:
- 1 Day late: Outright £100 late fee, even if you have no outstanding tax to pay.
- 3 months late: You will be charged a daily rate of £10 up to £900
- 6 months late: you will be charged either 5% of what you owe or £300- whichever is the larger amount.
- 12 months late: you will be charged either 5% of what you owe or £300- whichever is the larger amount. In serious cases a higher penalty of 100% of the tax owed can occur.
The Penalties for late tax payments are as follows:
- 30 days late: charged an initial 5% charge on the tax unpaid at that date
- 6 months late: a further 5% charge on the tax still unpaid at that date
- 12 months late: another 5% charge on the tax still unpaid at that date
Under the new penalty scheme a tax return filed 6 months late could attract a penalty of at least £1,300. The new penalty regime for late filing and late payment of self assessment income tax starts in April 2011 and applies to the tax year 2010/11.
For more information please contact us here at M.B. McGrady& Co.