Daily penalties of £10 will soon hit those yet to submit their 2016/17 Self-Assessment tax return form. It has led the Low Incomes Tax Reform Group (LITRG) to warn people in this position to file their return before the end of April in order to avoid the daily penalties accruing.
While anyone who did not file their tax return by the 31 January 2018 deadline will already have been charged a penalty of £100, they will also have to pay a daily penalty on top of that if it is more than three months late: for online returns with a 31 January 2018 filing date that would be from 1 May 2018.
The £10 daily penalties continue to be chargeable for up to 90 days unless the taxpayer submits their return within that time.
About 10.7 million people submitted their annual tax returns by midnight on 31 January 2018 but HMRC estimate that 745,588 people missed the deadline.
Robin Williamson, LITRG Technical Director said, “If a tax return for 2016/17 has still not been filed by 31 July 2018, the initial penalty of £100 and the daily penalties chargeable will amount to a total of £1,000, in addition to which a further penalty of at least £300 becomes chargeable. These automatic penalties take no account of the amount of tax an individual owes – even if you owe nothing or are owed tax back. If you have registered for Self-Assessment you must submit a tax return or inform HMRC that you no longer fall under the Self-Assessment criteria and ask them to agree to cancel the requirement for the tax return. If they do this, then any late filing penalties will also be abated. If someone believes they do not need to be in Self-Assessment, for example because their taxes are fully dealt with under the Pay As You Earn system or simple assessment, or because they have left the UK, they should be able to ask HMRC to withdraw the notice to file a tax return. Such an application must be made within two years of the end of the tax year to which the return relates. Even if they cannot get HMRC to cancel the requirement for the tax return to be filed, late filing penalties can be appealed if there is a reasonable excuse for filing late such as prolonged ill-heath, bereavement or family breakdown.”