Finance and Accountancy Briefing
Late tax return fines to rise sharply
People who submit their tax return after the 31 January deadline will face significantly higher penalties, HMRC has announced.
Previously, returns filed after the deadline would attract a £100 fine. However under the new framework, which first applies to 2010/11 tax returns, taxpayers who file their returns late will be charged £100 on day one and further daily penalties of £10 after three months.
It means that a tax return filed six months late could attract a penalty of at least £1,300.
According to HMRC, the old £100 penalty failed to act as a deterrent. It hopes the new harsher penalty system will therefore encourage people to ‘submit returns as soon as possible’.
‘HMRC spends a lot of time pursuing late returns and getting involved in unnecessary appeals work. We want to focus our resources on more productive work such as catching criminals and collecting tax,’ said a HMRC spokesperson.
For the full paper please download here.
More from HW Fisher & Company