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New year, new penalties – Institute warns of taxman’s tougher filing rules

The Chartered Institute of Taxation (CIOT) is warning taxpayers that HM Revenue & Customs (HMRC) have a new penalty system for late-filed Self Assessment tax returns.

The deadline for most of the UK’s 10 million Self Assessment-registered taxpayers1 to file on paper for the 2010-11 tax year passed on 31 October, but they can still file online up to midnight at the end of 31 January 2012.

The penalties for late submission of returns have been toughened this year in three ways:

  1. There is now a £100 fixed penalty for submitting your tax return late even if you have no additional tax to pay – previously the fine was cancelled if no tax was unpaid at 31 January.
  2. If the return is over 3 months late there is a £10 daily charge for up to 90 days.
  3. The subsequent, further fixed penalties have been replaced by a sliding scale starting at £300, depending on the tax owed and the length of delay before payment is made.2

Tina Riches, Technical Director at the CIOT, said:

“Time is running out for Self Assessment taxpayers who want to avoid HMRC’s new penalty regime. Midnight on 31 January is the deadline – there is no day’s grace this year.”

“In particular anyone who is liable for Self Assessment and has not yet registered for online filing needs to do so as soon as possible. HMRC say it may take up to 10 days to process the registration and you cannot submit your return online until this has been done.

“If you want HMRC to collect any tax you owe through your tax code for 2012-13 then the deadline is even earlier – 30 December. You can now ask for this on amounts up to £3,000.

“If taxpayers cannot lay their hands on the figures for their return, for example because they have not yet received details of foreign income, they may want to make best estimates and submit the return on time, rather than risk the wrath of the taxman.”

“Although taxpayers can appeal against a penalty on grounds of ‘reasonable excuse’, the evidence from paper returns is that the Revenue are being very strict on this and taking a lot of convincing that excuses meet their criteria. Don’t rely on this provision as a get-out.”

She added:

“Last year 845 people filed their returns online on Christmas Day3. It’s not everyone’s idea of festive fun but Self Assessment taxpayers will need to get their skates on in the new year to avoid having to send an unwelcome gift to the taxman in 2012.”

Notes to Editors

  1. According to HMRC, just over 10 million Self Assessment returns/notices to complete a tax return have been sent out for the 2010/11 tax year.

  2. The new penalties for late Self Assessment returns are:
    • an initial £100 fixed penalty, which will now apply even if there is no tax to pay, or if the tax due is paid on time
    • after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
    • after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
    • after 12 months, another 5% or £300 charge, whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due.

There are also additional new penalties for paying tax late of 5% of the tax unpaid at: 30 days; 6 months; and 12 months.

Further information on the new penalties and online filing of Self Assessment returns is available from the HMRC website at

3. Last year 6,907,410 people filed online by the 31 January deadline – around 78% of all returns submitted. 845 people filed their returns online on Christmas Day, 2,408 on Boxing Day, 16,230 on New Year’s Eve (including 96 in the hour before midnight!) and 5,130 on New Year’s Day. The busiest day for online returns was 31 January, when HMRC received a record 572,455 online SA returns. (Source: HMRC press release, 01/02/11)


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