For the tax year 2011/12 there is a new penalty regime for late filing of tax returns and the late payment of tax. Under the new regime penalties for filing a tax return six months late could exceed £1,300.
The new penalties – late returns
HM Revenue &Customs (“HMRC”) considered that the old penalty of £100 did not act as a deterrent for late filing of tax returns. The new penalties for late filing of tax returns are as follows:
- A £100 penalty will be imposed from the day after the deadline. This will be imposed even where the tax is already paid or there is no tax to pay
- A daily penalty of £10 up to a maximum of £900 where the return is greater than 3 months late.
- Additional penalties of the greater of 5% of the tax due or £300 where the return is over 6 months late.
- Further penalties of the greater of 5% of the tax due or £300 where the return is over 12 months late.
- In serious cases penalties of up to 100% of the tax due may be applied.
The new penalties – late filing
Penalties for paying your tax late are as follows:
- 5% of the unpaid tax if 30 days late.
- A further 5% of the unpaid tax if 6 months late.
- A further 5% of unpaid tax if 12 months late.