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: