Don't forget your tax return!
With the deadline for the submission of Self-Assessment Tax Returns less than three months away (31st January 2012), this year it is more important than ever to ensure that your Tax Return is done on time as there is a new much harsher penalty regime in place for late filing than ever before.
The new penalties for the late filing of Self Assessment Returns are:-
- An initial £100 fixed penalty which will now apply even if there is no tax to pay or if the tax due is paid on time,
- After three months, additional daily penalties of £10 per day up to a maximum of £900,
- After six months a further penalty of 5% of the tax due or £300 (whichever is greater), and
- After 12 months another 5% or £300 charge (whichever is greater), with in serious cases the penalty after 12 months being up to 100% of the tax due.
To illustrate the enhanced penalties, a table recently published in the Sunday Times showed that a tax liability of £10,000 would generate a fine of £952 under the old system but a fine of £4,252 under the new system if the Tax Return was submitted six months late.
Likewise, if the Tax Return was submitted 12 months late with the same tax liability, under the old system a fine of £1,803 would have been payable but under the new system a fine of £7,554 would have been payable.
In fact, even if the tax liability was nil the new system would generate a fine of £1,302 if six months late and £1,621 if 12 months late – even though the old system would have been penalty-free in this scenario.
Therefore, if you have not yet completed your Tax Return, you would be well advised to gather up all of the information required to complete the return sooner rather than later in order that you can avoid the penalties indicated above, and have some notice of any tax that you may have to pay by the end of January.
Please note that as the paper filing deadline was the end of October, all tax returns will now need to be submitted electronically.
If you have any queries on completing your tax return, or require assistance in completing the return, please contact a member of our team.
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