Self-Assessment Penalties - Changes For the Worst!

From our standpoint, the coalition government is using a wide range of methods to collect money in various ways, from taxpayers. We have certainly noticed an increase in the somewhat “threatening” tone of communications that clients have received for overdue payments, even for very small amounts.

Another thing that HM Revenue and Customs has recently reviewed is the penalty system for late submission of Self Assessment tax return forms. Previously, if you were slightly late submitting your return then it would cost you £100. If you were quite late, then a further £100 would have been charged. However, if you were late submitting your return, and you either owed no tax, or were due a refund, then HMRC could not charge you a penalty under normal circumstances.

This has all changed, and not for the better! An initial penalty of the same amount will still be charged, and after this, a daily penalty will be imposed. This will run up to three months after the deadline for submission, so could result in a fine of £900. After this, After this, there will be a further penalty of a flat rate of £300 or 5% of the tax lost, whichever is higher. And, surprise, surprise, these penalties will apply to all taxpayers, even those that don’t owe any tax for the year, or are due a refund.

These changes are a most unwelcome addition. The pressure to ensure that your Self Assessment tax return form is submitted promptly has never been higher, and the penalty regime will certainly mean that everyone’s attention should be focussed, for fear of the expensive consequences!

For any discussions on these points, or other matters, please call either Jeremy Fozzard or Mark Williams

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