Orange & Gold Blog

Increased penalties for late tax returns

Midnight on January 31is the deadline for taxpayers to file their tax return electronically and pay anything owed for the 2010/11 tax year.

About nine million people are in the self-assessment system. As of last Monday, the Revenue confirmed that more than two million forms were outstanding. About ten per cent of taxpayers – one million – typically miss the January deadline.

Fines of up to £400 million were collected by the Revenue last year, including interest on unpaid tax. More than 572,000 returns were filed online on January 31 last year and the Revenue is expecting a similar rush this year.

Those who miss the date will get an automatic £100 fine. But this year the flat fee will be applied on all late filers whether they owe tax or not – and even in cases where someone is due a rebate.

In the past, taxpayers who did not owe any tax would not be fined. Fees for very late filing and payment have also been significantly increased. After three months, if a return has not been made and tax not paid, there is a £10 a day fine, up to 90 days or £900.

After six months, £300 or five per cent of the outstanding tax, whichever is higher, will be charged. After 12 months another £300, or five per cent penalty, will be levied again. In some cases, after one year, the taxpayer could be fined 100 per cent of the amount owed.