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John Nuth Accountants is based in Wiltshire, between Salisbury and Warminster that offers professional accounting advice for small and medium businesses.

Penalties for late Tax Returns

John Nuth - Friday, February 06, 2015

One advantage of using an accountant to help you with submitting your self-assessment tax return is that they will assist and prompt you with meeting your statutory filing and payment obligations, therefore avoiding penalties for late tax returns.

Changes made by HMRC to their penalty regime now makes this more important than ever.

Starting with the 2010/11 tax year, HMRC has significantly increased the penalties imposed if you send in your self-assessment tax return late. The reasoning for these new and extremely punitive penalties is that previous penalty levels were set too low and did not provide sufficient incentive for people to get their returns in on time. More cynical observers might suggest that they have spotted an opportunity to impose yet another form of stealth tax.

Tax penalties and fines

If you submit your return online the deadline is 31 January, and the longer you delay, the more you'll have to pay.

  • One day late:  You'll automatically receive a £100 fine. This applies even if you have no tax to pay or have paid the tax you owe
  • Three months late:  A fine of £10 for each following day up to a 90 day maximum of £900. This is in addition to the fixed penalty above, so the overall fine could be £1,000
  • Six months late:  A fine of either £300 or 5% of the tax due, whichever is the higher. This will apply in addition to the penalties above
  • 12 months late:  Another £300 fine or 5% of the tax due, whichever is the higher will be added to your bill on top of the penalties above. 

In serious cases, if you're more than 12 months late with your tax return, you may be asked to pay up to 100% of the tax due as well as any tax you owe, doubling your payment.