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1.5m people filed their 2009-10 self-assessment forms late

1.5m people filed their 2009-10 self-assessment forms late

Contractor accountants and freelancers may have been among the 1.5 million taxpayers who received penalties for late filing and payment of self-assessment tax returns after this January’s deadline.

McGrigors obtained figures under a freedom of information request that showed 10 million self-assessment returns were issued and 15% of taxpayers were hit with penalties. That represents an increase of 8% on the previous year.

Jason Collins, a tax partner at McGrigors, said that percentage is far too high. HMRC is issuing fines at a worrying rate and now they have won the right to dramatically increase the fines they impose.

The penalty for late filing is £100, so the 1.5 million fines levied after January’s deadline represent a minimum £150 million for the Treasury. However, there have also been changes to the penalty regime that mean fines could be as high as £1,500 plus 100% of the tax due.

Rebecca Benneyworth from Tolleys explained that the government is trying to make the system of penalties consistent across all the UK’s tax regimes and we are now seeing new measures put in place on the first day of April and October each year.

As well as a change in the penalty structure for self-assessment, business owners should be aware that HMRC is planning to adopt a similar approach to the late filing of VAT returns. Late filing will attract an automatic £100 fine and penalties will increase as filing and payment becomes more overdue. It has not yet been decided when to implement this regime for VAT. The earliest possible implementation date is April next year.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Alarm Clock 1 by alancleaver_2000

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