HM Revenue & Customs have begun a phased issue of late filing penalties to self-assessment taxpayers who didn’t submit their tax return on time. The next two weeks will see the gradual issuing of 850,000 penalties of £100, as part of the new penalty system. The taxpayers who submitted their tax returns after the deadline of 31st January, or still haven’t submitted their tax return, will receive letters with a demand for £100. If a return hasn’t been filed, the letter warns people to do so in order to avoid further penalties. Under the new system, if a tax return isn’t filed with HMRC within the next three months, further penalties will be charged of £10 each day, up to a maximum of 90 days. Following a further three months, if the return hasn’t been submitted the larger amount of either five percent or £300 will be levied. After the tax return has been outstanding for 12 months the same penalties will be applied again, and interest will be added to the amount outstanding. In addition, if any tax remains unpaid, a five percent charge will be applied. Taxpayers who believe that a penalty should not have been charged, or who have a reasonable excuse for not filing their tax return on time, are advised to appeal before 31st March. Outsourcing to a low cost accountants will ensure tax returns are filed in a timely manner, avoiding penalties and interest charges. Stephen Banyard at HMRC points out that they don’t want the penalties, they want people to file their tax returns on time.
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