Anyone who has been issued with, and has still not filed, their 2010/11 Tax Return faces being smacked with horrendous penalties from 1 May 2012. They will have already been fined £100 but that will soon seem like peanuts.
The 2010/11 year is the first year when HMRC’s penalties get really nasty. The Self Assessment system was introduced in 1996/97 and has always had a £100 penalty for filing the return late. Despite inflation this fine never got raised, and so as a deterrent it became pretty useless. Furthermore if someone knew their tax bill would be less than £100 they knew the penalty would be reduced. If their tax bill ended up at £8.88 then the penalty would drop to £8.88.
Then for the 2010/11 year HMRC took the gloves off. Now if your return missed the deadline the penalty of £100 sticks. Even if you owe no tax. Even if you are due a tax refund!
For anyone who got hit with that penalty and have yet to file their 2010/11 Return then 30 April 2012 should be regarded as their absolute deadline, because things are going to get very unpleasant.
File your 2010/11 Return on or after 1 May 2012 and you will be charged a nasty £10 per DAY. So file on 11 May and the penalty will be £110.
These daily penalties continue for up to 90 days, so filing at the end of July will see you facing £900 of penalties. And they won’t go away just because you owe no tax. Ouch!
On their part HMRC is trying to say, like a smacking parent, words to the effect of ‘I don’t want to hurt you...I just want you to behave.’
In fact what HMRC’s Stephen Banyard is saying on the record is:
“We want the returns and not penalties. So, if you haven’t sent us your 2010/11 return, you need to do one of two things urgently – either send it online by 30 April, or call us if you think you shouldn’t have to complete one.”
So if you don’t want smacked by HMRC – get your Return filed online by 30 April 2012. And if you need a professional to help you – then ask one soon.
Adrian Huston, a former tax inspector, is a director of Belfast tax and accountancy firm Huston & Co – www.huston.co.uk or 028 9080 6080.