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.
Licenced Accountant in Brighton