HM Revenue and Customs has warned taxpayers that late filing of tax returns will result in significantly increased penalties from April 2011.  The rationale being that the current £100 penalty is "not enough of a deterrent"

The hike comes of course at a time of substantial belt-tightening within the public finances, and it is difficult to avoid the conclusion that the two are related. Tax payers will not be be comforted by this further margin-for-error squeeze

The new Late Filing penalties are:

  • £100 for 1 day late, even if there is no tax to pay OR if all taxed owed has been paid
  • 3 months late will incur a daily penalty of £10 per day - maximum £900
  • 6 months late will incur further penalties, the greater of 5% of tax due or £300
  • 12 months late will incur even more penalties, the greatest of 5% of the tax due or £300.  In more serious cases, or taxpayers who are repeatedly late, there could be penalties up to 100% of the tax due

... and for Late Payment:

  • 30 days late will incur an initial penalty of 5% of the unpaid tax
  • 6 months late will result in a further 5% of the tax still unpaid
  • 12 months late will involve in another 5% of the tax remaining unpaid

As before the Revenue will also charge interest on any tax liability not paid and on the penalties levied


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