Penalties for late filing

Historically, the penalty for submitting your personal tax return  late was nil provided you had paid all tax due. However, for 2010/11 this is no longer the case and in most cases a £100 penalty will be payable.

We understand that HMRC will start issuing late filing penalty notices  for 2010/11 from 17 February 2012. 

If you do receive a penalty it is worth remembering that HMRC will consider cancelling this if you had no need to file a tax return and therefore should not be within the self-assessment regime.  However, all company directors are required to file a self-assessment tax return regardless of the levels of their income.

For further information or to discuss, please contact Lesley Sutton on 01484 550037 or taxchat@revellward.co.uk

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Historically, the penalty for submitting a tax return late was limited to the tax payable provided the amount owed was less than £100.  However, starting with the 2010/11 period these rules were amended so that a late filing fee of £100 applied to all tax returns regardless of the amount owed.  This means that even individuals within the self assessment regime who had no tax to pay will be subject to a £100 fine if their 10/11 tax return was not filed by 31 January 2012.

This will become more of an issue now since HMRC have announced that as of 17 February 2012 they will be start to issue the late filing penalty notices for the 2010/11 period.

However, as a concession HMRC has invited individuals who believe they should not be within the self assessment regime to contact them.  If they do so, HMRC will ask some questions and decide if self assessment was required for 2010/11 or not.  If they decide that you should not be within self assessment they will cancel the need to file a tax return and will cancel the penalty issued.

There has been some frustration towards HMRC on their decision to introduce these penalties in the first place on the basis that it is undermining the fact that it is a self assessment system – the thought being that if you have no tax to pay you should not need to declare so.   Therefore, it appears HMRC have offered the above concession to ease the transition process and to try to ensure tax payers are not being caught by a system they should not be in in the first place.

Therefore if you believe that you are needlessly worrying about needing to file a tax return and receive a penalty notice give us a call to discuss, or call HMRC directly on 0161 931 9070.  You will need to have the copy of the penalty notice when making the call so that you can confirm details on the letter.

Unfortunately there are some instances were filing a tax return is unavoidable, for example if you are a company director.  However, if you have been preparing tax returns for a number of years and are regularly in a nil tax paying or repayment position it is definately worth checking to see if you need to continue to file tax returns going forward.penalty.

If you have any questions or would like assistance please do not hesitate to contact Lesley Sutton on 01484 550 037 or email taxchat@revellward.co.uk.