Under the new regime taxpayers could find themselves paying penalties for late filing even if they don’t owe any tax or have already paid the tax due.
Yvonne Graham, Tax manager at Ensors Chartered Accountants, said “Under the previous system, anyone who filed their tax return late automatically received a £100 penalty with a further £100 penalty if it still hadn’t been filed after 6 months. However, as the penalty could not exceed any tax due, if you didn’t owe any tax you didn’t get charged the penalty.” She continued, “Under the new system, the initial penalty of £100 will apply even if there is no tax to pay (or it has already been paid before 31 January deadline) and then after 3 months there will be daily penalties of £10 with a maximum of £900. Further penalties accrue the longer the tax return remains overdue – and interest is levied not only on any tax outstanding but also on the penalties”
Tax returns can be filed online until midnight on 31 January.
For further information on penalties for late filing please visit the HMRC website or read Yvonnes Blog