New HMRC penalties for late tax returns and late payments
A new penalty structure for the 2010/11 tax year can mean the later you file your tax return the bigger the fine.
Image: David Cheskin - PA Archive
Over 10 million Self Assessment returns or notices to file a tax return have been sent out by HMRC for the 2010/11 tax year.
It is therefore important to know how the new penalty structure works for those who file their tax returns late.
The new penalties for sending in your tax return late are:
- An initial £100 fixed penalty, even if you have paid your tax on time or have no tax to pay.
- After three months, additional daily penalties of £10 per day, up to a maximum of £900.
- After six months, a further penalty of 5% of the tax due or £300, whichever is greater.
- 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 your tax late are:
- 5% of the tax unpaid at 30 days.
- A further 5% of the unpaid tax at six months.
- An additional 5% at 12 months.
The current tax return deadlines remain unchanged on 31 October for all paper returns and 31 January for online returns. The deadline for paying any tax due also remains the same on 31st January.
To find out more about self-assessment visit our tax clinic.
Please note that articles on MSN Money do not constitute regulated financial advice, which recommends a course of action based upon the specifics of your personal circumstances. The articles are intended to provide general personal financial information. We urge you to consult an Independent Financial Adviser (IFA) before making any important decisions about your finances. You can search for an IFA in your local area. Any statement regarding financial services products and tax liability is based on legislation and tax practices as at 6 April 2011, which is, of course, subject to change. The value of any tax benefits or reliefs depends upon the individual circumstances of the investor. When investment performance is mentioned you should remember that past performance is no guarantee of future performance. Where products have an underlying investment content, in many cases the value of the investment can fall as well as rise. For with-profit based investments, there is no guarantee as to the level of bonuses that will be declared, if any. Where mortgages or secured loans are explained do remember that your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. All mortgages are subject to underwriting, status and are not available to people under the age of 18.
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