£10/day penalty
HMRC is collecting £10 per day every day from workers who have failed to file their returns on time, Since May 1, officials at HM Revenue and Customs have been thrashing 650,000 late filers with a £10-a-day fine.
Many of those affected are likely to be the self-employed, higher earners with savings and landlords and pensioners make up the rest. Many may not even owe any tax, but have simply failed to file a return to prove their earnings. Their tax returns were originally due on January 31 this year, covering their finances for the 2010-2011 tax years. But after missing the original deadline, and picking up an initial £100 fine, they must now pay a flat £10 a day on top for every further delay of 24 hours.
If they have not filed by the end of July, that bill will stand at £900 – when they will then face yet another penalty, this time for £300. The tougher rules will even affect those who do not owe a penny to the taxman.
Guy Bridger, director of Taxfile, also working with Tax Simplification project for HMRC, said: ‘The real problem is that the penalties will come as an enormous financial shock. ‘A lot of people who kept their tax affairs away from the government for a long time will be dismayed at facing these huge fines.’
Generally, a ‘reasonable excuse’ is when some unforeseeable or unusual event beyond your control has prevented you from filing your return on time. For example: a failure in the HMRC computer system, your computer breaks down just before or during the preparation of your online return,a serious illness, or the onset of a disability or a serious mental health condition has made you incapable of filing your tax return etc. About one million people fail to beat the January deadline every year, despite letters sent as a reminder. This January, HMRC fined 850,000 people for late filing of their tax returns, netting £85million in one fell swoop.
Majority have yet to put their affairs in order. There are also additional new penalties for paying late of five per cent of the tax unpaid at: 30 days; six months; and 12 months. Anyone who hasn’t yet sent in their 2010/11 return needs to do so urgently – please call our friendly tax team at 0208 761 8000 for any help regarding this.