HMRC Giving Out 850,000 Late Tax Return Penalties over the Next Fortnight
Fewer self-employed Brits handed in their tax return in late this year in comparison to last year because HM Revenue & Customs is issuing a scarcer number of penalties.
HMRC have stated that they will be giving out 850,000 fines over the next two weeks which is 550,000 less than in 2011.
But there is concern that there is still an amount of contractors and freelancers who haven’t sent in their tax returns yet, despite the deadline surpassing and the taxman is warning anyone trailing behind that they should do it as soon as possible.
Stephen Banyard, HMRC spokesperson, said: “People who receive a penalty notice should act now to avoid further penalties.”
Letters are being issued to taxpayers who failed to send in their 2010/11 self-assessment returns on time, even though there was a deadline extension.
If contractors took advantage of the deadline leeway and filed their tax return online by midnight on 1st or 2nd February, HMRC will not be issuing them a penalty.
The penalties for late self-assessment returns are:
- an initial £100 fixed penalty, which will now apply even if there is no tax to pay, or if the tax due is paid on time;
- after 3 months, additional daily penalties of £10 per day, up to a maximum of £900;
- after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
- after 12 months, another 5% or £300 charge, whichever is greater.
If in the next fortnight contractors receive a late-filing penalty but want to appeal and have a reasonable excuse, they are being advised to do it in writing by 31st March.
According to HMRC, an example of a legitimate reason for missing the deadline includes a family bereavement or illness.
You could avoid incurring any further fines by employing a dedicated contractor umbrella company who can do everything for you from sorting out paperwork to managing all tax and VAT matters with HMRC.
Make sure that you are fully compliant with regards to all your taxes by using a UK umbrella service such as Pulse Umbrella.
Posted on 22 Feb 2012 in: HMRC
Tags: tax penalties, tax return
