Don’t delay as you’ll have more to pay for your self assessment!

HMRC have implemented a new fining system for people who are late filing their self assessments.  The new system is in place for the tax year 2010/11 so applies to self assessments which are due to be filed on or before the 31^st January.  

Lateness of return

• 1 day to 3 months will see a fine of £100 applied
• 3 – 6 months will incur a further £10 per day charge up to the maximum of £900 for the 90 day period.  This is in addition to the £100 initial fine.
• 6 - 12 months late would mean you pay the top two fines (£1000) plus £300 or 5% of the tax owed depending on what is higher.
• 12 months plus would incur all the above fines and in serious cases would also mean you have to pay 100% of your tax due as well.  These are all fines only and still would not pay your tax bill off.

For example Mrs Jones is due to complete her tax return by 31^st January 2012 for the tax year 6^th April 2010 to 5^th April 2011.  She is six months late filing her return so she would pay the £100 penalty, she would pay the £900 penalty for each of the days over 3 months (1^st May to 29^th July) and she will now be paying an extra £300 or 5% of the tax due, depending on which was higher.

One to watch is that the penalties above can still be charged even if the tax is paid on time but where the self assessment papers haven’t been submitted online.  Also try where possible not to leave the filing of your assessment to the last minute as HMRC can have a very busy website during those last few days!  If you use an accountant then best to give them the paperwork as soon as possible so there are no last minute rushes.

If you have any queries about self assessments then email sam@accountsandbooks.co.uk or call 01202 802018