Late tax form returners to be hit with daily charges from next month

(2 minutes to read)

For anyone who did not file and pay their 2016/17 Self-Assessment tax return form by the 31st January 2018 deadline, they will already have been charged a penalty of £100 and now a daily penalty will soon come into force.

The Low Incomes Tax Reform Group (LITRG) are warning late tax form returners that from the end of April, they will be charged a daily penalty.

According to HMRC, it has been estimated that as many as 745,588 people missed the tax return deadline – for those people, they would already have been charged a £100 penalty and from the end of April will also have to pay a daily penalty on top of that if it is more than three months late: for online returns with a 31st January 2018 filing date that would be from 1st May 2018.

The £10 daily penalties continue to be chargeable for up to 90 days unless the taxpayer submits their return within that time.

The late submission penalties are as follows:

  • £100 – applied immediately the form is late
  • £10 per day – charged once the return is three months late for a maximum of 90 days
  • The higher of £300 or five per cent of the tax due – applied if the form is six months late; and
  • A further £300 or five per cent of the tax due (whichever is higher) – applied if the form is 12 months late

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Robin Williamson, LITRG Technical Director, commented, “If a tax return for 2016/17 has still not been filed by 31 July 2018, the initial penalty of £100 and the daily penalties chargeable will amount to a total of £1,000, in addition to which a further penalty of at least £300 becomes chargeable. These automatic penalties take no account of the amount of tax an individual owes – even if you owe nothing or are owed tax back.

‘’If you have registered for Self-Assessment you must submit a tax return or inform HMRC that you no longer fall under the Self-Assessment criteria and ask them to agree to cancel the requirement for the tax return. If they do this, then any late filing penalties will also be abated.”

Williamson added, “If someone believes they do not need to be in Self-Assessment, for example because their taxes are fully dealt with under the Pay As You Earn system or simple assessment, or because they have left the UK, they should be able to ask HMRC to withdraw the notice to file a tax return. Such an application must be made within two years of the end of the tax year to which the return relates.

“Even if they cannot get HMRC to cancel the requirement for the tax return to be filed, late filing penalties can be appealed if there is a reasonable excuse for filing late such as prolonged ill-heath, bereavement or family breakdown.”

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