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Hmrc Self Assessment Penalty Regime

HMRC have a penalty regime for Tax Returns which results in a taxpayer facing penalties if they are submitted after the deadline.

Previously a penalty of £100 was issued if a Tax return was not filed on time and this was followed by a further £100 penalty if it was not filed six months after the due date. These penalties were capped at the level of tax due at the filing date. If a taxpayer had no liability for the year, had paid all their tax on time or was due a repayment the penalties were reduced to nil.

The new sanctions are as follows:-

- Day one late: an initial penalty of £100.

- Three months late: an automatic penalty of £10 a day up to a maximum of £900.

- Six months late: further penalties will be charged of the greater of 5% of the tax due or £300.

- Twelve months late: the penalty will be the greater of 5% of the tax due or £300. In serious cases, a higher penalty of up to 100% of the tax due will be charged.

All of the above penalties apply even if there is no tax due or all tax has been paid on time.

As well as late filing penalties interest will run on any late payment of tax and the following surcharges for late paid tax apply:-

Thirty days late - 5% of the tax unpaid at that date

Six months late - A further 5% of the tax unpaid at that date

Twelve months late - A further 5% of the tax unpaid at that date

For more information on penalties or tax in general contact Stuart Shaw CTA via email or 01622 758257.

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