New penalties for late filing of tax returns and for late payment of tax

e would like to draw to your attention some key changes concerning the penalties that will be charged if your 2010/11 tax return is filed late or your tax is paid late.  

Penalties for filing late

 One day late and you will be charged an initial penalty of £100 (even if you have no tax to pay or you have already paid all the tax you owe).

• Three months late and you will be charged an automatic daily penalty of £10 per day, up to a maximum of £900.
• Six months late and you will be charged further penalties, which are the greater of 5% of tax due or £300.
• Twelve months late and you will be charged yet more penalties, which are the greater of 5% of tax due or £300.  In particularly serious cases you face a penalty of up to 100% of the tax due.

 Penalties for paying late

 Thirty days late and you will be charged an initial penalty of 5% of the tax unpaid at that date.

• Six months late and you will be charged a further penalty of 5% of the tax that is still unpaid.
• Twelve months late and you will be charged a further penalty of 5% of the tax that is still unpaid.

 These penalties are additional to the interest you will be charged on all outstanding amounts, including unpaid penalties, until payment is received.

Please ensure you send us all information requested as soon as possible to enable us to complete your tax return on a timely basis and to advise you what tax you need to pay and thus avoid these penalties!

For more information from HMRC’s webiste: Click here