HMRC warns self-assessment taxpayers over "tougher than ever" fines

Wednesday, 14 September 2011 12:09

Individuals and businesses that file tax returns have been warned that stiffer penalties for late returns and payments come into effect this autumn.

Geroge Bull, senior tax partner at accountancy firm Baker Tilly, described the new charges for overdue payments as "tougher than ever".

He explained: "The days when it did not matter when the return was submitted, so long as all taxes due were paid on time, are well and truly over and taxpayers who do not file their self-assessment returns on time face steep penalties."

Meanwhile, senior tax manager at taxback.com Seamus Murphy said penalties in previous years have been "relatively benign".

"This gave no incentive for taxpayers to file if they thought they had no further tax to pay," he continued. "That's one reason almost a million taxpayers file their returns late each year."

Mr Murphy added: "The new penalty regime however is considerably more aggressive and penalties could very quickly run into the thousands with further penalties such as interest and surcharges on top."

These new fines, which apply to self-assessment returns for 2010/11 and all future financial years, include an initial £100 fixed penalty which applies even if there is no tax to pay or if the tax due is paid on time.

In addition, there will be an extra charge of £10 per day after three months of non-payment, up to a maximum of £900.

After six months, a further penalty of five per cent of the tax due or £300 - whichever is greater - will be payable, plus another after 12 months.

In serious cases, the penalty after 12 months can be up to 100 per cent of the tax due.

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