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Penalties for late filing of income tax returns

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Thursday March 24, 2011 at 10:00am

New late filing and late payment penalties will apply from 6 April 2011 (in relation to tax years ending after 5 April 2010) for personal, trust and partnership returns.

The existing rule that the late filing penalty is the lower of £100 and the balance due will be replaced. That is hardly a surprise, but the good news is that the level of the basic £100 penalty remains.

The penalties for late filing will include: 

  • £100 penalty immediately after the due date for filing (whether or not the tax has been paid) 
  • Daily penalties of £10 per day for returns that are more than 3 months late, running for a maximum of 90 days
  • Penalties of 5% of tax due for the return period (or £300 if greater) for prolonged failures, which arise after 6 months and again after 12 months 
  • Higher penalty of 70% of tax due where a person fails to file for over 12 months and has deliberately withheld information necessary for HMRC to assess the tax; this is 100% if deliberate with concealment)

Where we file tax returns on behalf of clients we are well aware of these deadlines – but those who choose to take responsibility for filing returns themselves should take note.

Andy Parker
Chartered Accountant Birmingham

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