Self assessment taxpayers who have failed to submit their 2010-11 tax returns will receive penalty notices for a minimum of £1200. Around half a million penalty notices are being issued this week by HM Revenue & Customs. The filing deadline this year for taxpayers who file online was 2nd February 2012, while the filing deadline for paper returns was 31st October 2011.
Although HMRC said that it has issued 44 per cent fewer penalties, there are still six per cent of 2010-11 tax returns outstanding, which will incur penalties. The penalties are made up of a £100 fixed penalty, which is issued automatically following the filing deadline. If the tax return is still outstanding come 1st May, daily penalties will be charged at £10 per day up to a £900 maximum figure. In addition to these charges, if the tax return remains outstanding after six months, there will be a minimum £300 charge or five per cent of the tax which is due – whichever amount is higher.
According to HMRC, it wants the tax returns to be submitted rather than issuing penalties that were increased to encourage taxpayers to file in a timely manner. If a self assessment taxpayer believes that they shouldn’t be in the self assessment system, they are advised to contact HMRC as soon as possible. Rather than risk receiving penalties that quickly add up through the year, outsource to online accountants, ensuring that your self assessment tax return is filed promptly each year and avoiding the extra burden of penalties.