HM Revenue and Customs (HMRC) recently introduced a campaign for taxpayers to bring their tax affairs up to date under Self Assessment.

This is aimed at individuals who have been issued with a tax return for any tax years up to 5 April 2012 but who have not yet submitted the return to HMRC.

Individuals who have outstanding tax returns and who do not take advantage of this campaign may face a penalty charge of 100% of the outstanding income tax and National Insurance Contributions (NIC) (200% for overseas matters for the 2012 tax year).

If you would like to join this campaign, you must notify HMRC and submit all outstanding tax returns up to 5 April 2012 by 15 October 2013.  In addition, any outstanding income tax and NIC must be paid by 15 October 2013.  It may be possible to arrange a payment plan with HMRC’s My Tax Return Catch Up team.

Taxpayers cannot take part in this campaign if HMRC has opened an investigation, enquiry or compliance check into their tax affairs.  Also, only taxpayers currently registered for Self Assessment can take advantage of this campaign.

The deadline for posting 2011/12 paper tax returns to HMRC before the 31 October deadline, is now just days away.

Any paper tax returns received on, or after 1 November 2012, will result in a £100 penalty – even if there is no tax to pay or the tax due is paid on time.

Anyone unable to submit a paper return by the end of the month, can avoid a late-filing penalty by sending their return online by 31 January.

And for anyone sending a paper return close to the deadline, HMRC recommends taxpayers obtain proof of posting, as this provides evidence of your posting date in the event of any appeal against a late-filing penalty.

If you are in doubt get in touch with us for helpful advice.

Taxpayers who have yet to file tax returns for 2009/10 have less than a week left to take advantage of reduced penalties for late returns.

Under HMRC's tax return initiative, outstanding tax returns up to and including 2009/10, if submitted before 2 October 2012, will be subject to reduced penalties, even though new penalties for late tax returns have already come into effect. 

“Time is running out, so taxpayers with tax returns outstanding should act immediately if they wish to keep the weight in their wallet and off of their shoulders,” Baker Tilly said.

Under the new rules a penalty of £100 is charged when a return is just a day late.  When the return remains outstanding after 3 months, a daily penalty of £10 is levied for up to 90 days. When the return is 6 months late, the higher of £300 or 5% of the tax due is imposed and this penalty is then repeated if the return remains outstanding 12 months after the deadline. 

In serious cases, HMRC can charge penalties of up to 100% of the tax due for a return that is over a year late. These staggered penalties are automatic and cannot be mitigated without a “reasonable excuse”, such as a serious illness or a breakdown in HMRC’s computer system.

Where late payment applies, further penalties equal to 5% of the tax due are levied 30 days and 6 months after the 31 January and 31 July payment deadlines. There is also interest to pay.

_The Self Assessment deadline is fast approaching for for the tax year ending 5th April 2012 and you need to make sure  that you meet the following deadlines or you will receive a penalty from HMRC.

Deadline for Paper Returns
All paper returns must be received by HMRC by midnight on 31 October 2012.

The only exception to this is if HMRC have written to you after 31 July 2012 asking you to make a self assessment return. Then you have three months after the date on your letter to submit the return.

All self assessment notifications are usually sent out by HMRC during April.

Deadline for Online Returns
All online returns must reach HMRC by midnight on 31 January 2012.

Again you will only have an extension on this date if HMRC write to you requesting a self assessment return after 31 October and you will have three months from the date on the letter to submit the return.

If you want HMRC to collect any tax due through your tax code then you must submit your return before 30 December 2012. This is only an option if the tax owed is less than £3,000

Penalties
Length of delay

Penalty you will have to pay

1 day late

A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.

3 months late

£10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above.

6 months late

£300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.

12 months late £300 or 5% of the tax due, whichever is the higher.
In serious cases you may be asked to pay up to 100% of the tax due instead.
These are as well as the penalties above.