Tax submission deadline looms and HMRC fines are set to increase, warns accountants James Cowper
HMRC data shows that it has handed out fines in record numbers to taxpayers who submitted late self assessment returns, warns accountants James Cowper.
Penalties have risen by 56% in the last five years and last year over 1.5 million fixed penalty fines were levied of between £100 and £1500 depending on the amount of tax individuals owed.
After the minimum fine of £100, an individual is charged £10 for each day they do not file their tax return.
Stephen Barratt, Private Client Tax Director at James Cowper, warns: “Recent history clearly demonstrates that fines could be imposed on even more people this time round.”
Stephen continues: “The government would prefer all taxpayers who need to complete a tax return to file online via the Revenue’s website as it is easier and more cost-effective for them. However, not everyone will be able to file their returns online. Some returns can be extremely complicated and the Revenue’s online filing software hasn’t always coped in the past.
“The deadline of 31 October for filing a paper return – under three weeks away - is fast approaching. If your return is complex you may not realise that you are unable to file online until after this deadline has passed. This would effectively leave you with no option to file a paper return and potentially open to a penalty.”
“If the reason for not being able to submit lies with HMRC, those affected should print off a copy of the error message that accompanies the rejection as proof of their attempt to file. This will help to avoid a penalty. This should then be attached to the relevant form where they can detail the problem, available at www.hmrc.gov.uk/carter/sa-reasonableexcuse.pdf. Attempts to submit should however continue to be made up to the filing deadline.”
Stephen also warns that more penalties are likely to be due for 2011 Returns because of a change to the rules.
“For the 2011 Self Assessment returns a penalty will be due for late submission even if there is no tax outstanding at the filing date. Daily penalties of £10 per day will also take effect if the tax return is still outstanding three months after the filing date, and further penalties can apply if the delay continues beyond six months.”
Whatever your circumstances, James Cowper recommends seeking the help of an agent to help complete and file a tax return. Most agents use special software that will enable the electronic filing of tax returns without problems or restrictions, and in the event that there is a problem filing they can manage the position the HMRC.
Stephen Barratt, Partner, James Cowper LLP +44(0)1635 35255 or email sbarratt@jamescowper.co.uk
14.10.11