|Half a million late self assessment returns in line for £1,200 penalty, Holland & Co Chartered Accountants warn Wigan Businesses!!
Holland & Co Chartered Accountants have warned that half a million people who have yet to file their 2010/11 tax returns will begin to receive additional penalty letters from next week.
Many Wigan Businesses may face fines of up to £1,200, made up of a maximum £900 in daily penalties for non-filing and an additional late filing penalty of £300, or 5 per cent of the tax due, whichever is the greater.
The number of outstanding returns halved in 2012, down to 5.9 per cent compared to 10.7 per cent the previous year, resulting in 518,000 fewer penalties.
However, those who missed the 2 February deadline will face new and higher penalties introduced in April this year, in an attempt to boost the incentive to file tax returns on time and reduce the cost to taxpayers when HMRC chases up missing forms.
Those who failed to submit their return on time would have faced a £100 penalty notified to them in the spring, even if there was no tax to pay.
Quote from Nigel Holland:
“HMRC want the returns, not penalties however some Wigan people are under the mistaken belief that if their business has closed down and not made any money that they do not need to submit a return. Other people have been unable to find the time to send their business records to their Accountant and some people may have moved address and not notified either HMRC or their Accountant.
High penalties are now being issued by HMRC to encourage the tax payers to take action.
This year, half a million more people have filed their return - which means HMRC are issuing 44 per cent fewer penalties.
However, despite several reminders, nearly six per cent of people have not sent their 2010/11 tax returns to HMRC and they will be getting a penalty.
HMRC removed 273,000 people out of self-assessment this year, likely to occur when people move from self-employment into a permanent or temporary role with one employer. Those who believe they do not need to be considered for self-assessment can apply online to be taken off HMRC's register and, if approved, mistaken returns and penalties will be cancelled.
In some cases there may be legitimate reasons for failing to submit tax returns - bereavement or family illness for example - and those are able to appeal against HMRC's decision. Further information on HMRC penalty regime and how to appeal can be found on our website:
The new penalties for self-assessment are:
· An initial penalty of £100 for failure to submit a tax return , regardless of whether there is no tax to pay, or if the tax due is paid on time
· Additional daily penalties of £10 after three months, up to a maximum of £900
· After six months, a further penalty of £300, or five per cent of the tax owed, whichever is the greater
· A further £300 or five per cent charge after 12 months.