About 500,000 people are being sent notices of penalties of at least £1,200 for failing to submit their self-assessment tax returns. The HM Revenue and Customs (HMRC) penalty is made up of £900 in daily fines alongside a late-filing penalty of £300 or 5% of the tax due.
Some penalties might be waived on proof of a reasonable excuse, such as a family illness, but anyone receiving a penalty needs to communicate with HMRC regarding the problems they are facing and make arrangements to complete their tax return.
The deadline for online returns this year was 2 February, while paper returns would need to have been submitted by the end of the previous October. “We want the returns, not the penalties, this year half a million more people have filed their return – which means we are issuing 44% fewer penalties,” HMRC said. “But despite several reminders, nearly 6% of people have not sent their 2010/11 tax returns to us and they will be getting a penalty. We recognise that there will be some people within this group who do not need to be in self-assessment, and we will be happy to remove them from the system and cancel their penalty.”
The penalties being issued over the next few weeks are in addition to £100 late-filing penalties for missing the deadline, which was sent out in late February and early March.
If you do not have a reasonable excuse, these fines are non-refundable even where there is no tax to pay. It’s now very expensive to be late with filing your tax return.