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Revenue reminder on new tax return penalties

New penalties were introduced on 6 April 2011 for Self-Assessment customers who fail to meet their tax return and payment deadlines.

HM Revenue & Customs (HMRC) is reminding individuals and businesses about new Self-Assessment penalties for late returns and late payments, which come into effect this autumn.

The changes will affect Self-Assessment returns for 2010/11, and all future financial years.

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.

New penalties for paying late are 5% of the tax unpaid at:

  • 30 days;
  • 6 months; and
  • 12 months

i.e. resulting in a possible further 15% payable.

Interest will also be charged on top of these penalties with the current (at 1st Oct 2011) annual rate of interest being 3.0%.

The tax return deadlines remain unchanged – 31 October for paper and 31 January for online returns. The deadline for paying any tax due also remains the same at 31 January.

If you are concerned that you may be required to complete a Self-Assessment tax return please see the following article – “Do I need to complete a tax return” or contact FHC.