Festive adverts featuring our favourite Christmas trucks have now been replaced with HMRC’s unmistakable advertising campaign reminding taxpayers that they must submit their return and pay any tax due by 31 January 2013.
The danger of leaving tax returns to the last minute means that taxpayers may be more open to penalties and interest on returns not filed and payments not made.
Over the past two years, HMRC have increased their late filing penalties. As such, a taxpayer who fails to submit a return on time can expect to receive penalties as follows:
|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.
This is in addition to the penalties above.
The penalties can soon rack up. In addition to this, where tax due is not paid by 31 January 2013 interest and late payment penalties will be applied. HMRC have an interest rate set at 3% on outstanding tax due. Late payment penalties will be levied at 5% of the tax due, where it is not paid within 28 days and subsequently 6 months and 12 months from when it falls due.
It is easy for these penalties and interest to mount up quickly. Therefore it is imperative to get everything to HMRC in good time.
How can we help?
If you would like any assistance with anything in relation to Self Assessment, please do not hesitate to contact either Kirsty MacDonald or Darrell Booth or alternatively why not fix a meeting with one of our team for an informal chat?