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Self Assessment Tax – new regime significantly increases penalties for late filing

17 January 2012 |

For the
tax year 2011/12 there is a new penalty regime for late filing of tax
returns and the late payment of tax.  Under the new regime penalties for
filing a tax return six months late could exceed £1,300.

The new penalties – late returns

HM
Revenue &Customs (“HMRC”) considered that the old penalty of £100
did not act as a deterrent for late filing of tax returns.  The new
penalties for late filing of tax returns are as follows:

  • A £100 penalty will be imposed from the day after the deadline. 
    This will be imposed even where the tax is already paid or there is no
    tax to pay
  • A daily penalty of £10 up to a maximum of £900 where the return is greater than 3 months late
  • Additional penalties of the greater of 5% of the tax due or £300 where the return is over 6 months late
  • Further penalties of the greater of 5% of the tax due or £300 where the return is over 12 months late
  • In serious cases penalties of up to 100% of the tax due may be applied

The new penalties – late filing

Penalties for paying your tax late are as follows:

  • 5% of the unpaid tax if 30 days late
  • A further 5% of the unpaid tax if 6 months late
  • A further 5% of tax unpaid tax if 12 months late

For further information or to discuss the issues raised, please contact Guy Abbiss, Stephen Wright  or Bina Gayadien on +44 (0) 20 3051 5711

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Circular 230 disclosure

To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

The author


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