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New penalties for late filing and payment
1st March, 2011
Smailes Goldie Chartered Accountants, in Hull and Barton-upon-Humber, are warning that new penalties are due to be introduced in April for late filing and late payment of tax, under legislation included in the Finance Act 2009.
HM Revenue and Customs (HMRC) has just published a draft order to bring in new filing penalties for Income Tax Self-Assessment (ITSA) from 6 April this year, applicable to returns and payments due for the tax year 2010/11 onwards.
Ian Lamb, Partner at Smailes Goldie, said:
"Under the new regime, the penalty for late filing of personal and trust returns will no longer be capped at whichever is lower of £100 or the tax outstanding on 31 January.
"The penalties will now include an immediate £100 charge, plus a penalty of £10 per day for returns that are more than three months late, up to a maximum of 90 days, and for prolonged failures of over six months, and again at 12 months, a penalty of five per cent of the tax due or £300 (whichever is greater). "A penalty of 70 per cent of the tax due will apply where a person fails to submit a return for 12 months and has deliberately withheld information for HMRC to assess the tax due, rising to 100 per cent if the behaviour is 'deliberate with concealment'".
For late payment of tax, the penalty will now be 5% of the amount of tax unpaid, with a further 5% of amounts still unpaid at 6 and 12 months. Penalties will be suspended if the taxpayer agrees to a "Time to Pay" arrangement with HMRC.
For more information or advice, please contact Smailes Goldie Chartered Accountants on Hull 01482 326916 or Barton 01652 632927.
