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1.5 Million SA Penalties

Following a freedom of information request it has been revealed that 1.5M individuals were served with penalty notices for failing to file their 2010 self assessment tax returns following the 31st January 2011, representing a 8% increase on the previous year.

Out of 10M tax returns issued, this represents 15% of taxpayers that were penalised and with the late filing penalty starting at £100, a haul of £150M for the Treasury.

With late filing penalties now being fixed at £100 even if someone has no tax to pay or has paid their tax on time, it is anticipated that more people are likely to be receiving penalties following the next round of self assessment deadlines, i.e. 31st October of this year (paper returns) and 31st January 2011 (online filing).

Additional penalties also apply where the filing of a tax return is delayed further beyond the relevant deadline, as follows:

Length of Delay Penalty
3 months £10 for each following day – up to 90 day maximum of £900. This is in addition to £100 fixed penalty.
6 months £300 or 5% of the tax due, whichever is the greater. This is in addition to penalties above.
12 months £300 or 5% of the tax due, whichever is the greater. In serious cases, 100% of the tax due instead. This is in addition to penalties above.

The only right of appeal against a penalty is where an individual has a reasonable excuse for filing their tax return late. Whilst each appeal is judged on its own merits, HMRC will accept the following as reasonable excuses:

  • Documents lost through theft, fire or flood that can't be replaced in time.
  • Life-threatening illness, e.g. heart attack that prevents a person dealing with their tax affairs.
  • Death of a partner shortly before the deadline.
  • Industrial action by Royal Mail over a lengthy period of time.
  • Issues with the online service, with no work-round, provided that the error message is recorded.


By Andy Vessey


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4 thoughts on “1.5 Million SA Penalties”

  1. Andrew

    I think its time to press hmrc the other way. This clearly shows many people struggle to cope. Accountants and hmrc sometimes overlook it, but they have an aptitude for buracracy and maths. Not all people do.
    Penalties have now got out of control. Linking them to the tax payable was fair, ethical and decent. I cannot understand these new draconian changes.
    It seems to me that hmrc are predators, their prey, innocent decent people who simply have mathematical and organisational problems. These people suffer for these in all walks of life in any case, so these new penalties are simply not right.

  2. David S

    You have got to be kidding. This is censorship gone mad. For an organisation that deals with IT people this is a dreadful piece of coding that eliminates three innocuous letters in the middle of a word because they form, when standing on their own, an allegedly rude word.

  3. Seb Maley

    Hi David/Andrew

    You’re right, that is a bit over-zealous. I’ve removed the filter now, so it shouldn’t happen again.

    Thanks for pointing it out.


  4. Phil

    This is comparable to (found by google search – ‘percentage of turnout in election uk’):

    “UK local elections: Low turnout and anti-government vote
    By Julie Hyland
    5 May 2012

    Local council elections in England, Scotland and Wales on Thursday were characterised by widespread abstention, as less than a third of those eligible turned out to vote. In the inner cities especially, turnout was much lower, with figures of just 10 and even 8 percent reported in some wards.”

    Perhaps the non-returners are expressing a significant democratic wish!

    Suggesting a serious problem with the hmrc document/procedures/culture/raison d’etre etc?

    Draconian penalties introduced quickly times of populace adversity seem out of touch with reality.

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