Tag Archive | "late filing penalties"

Will an HMRC penalty notice drop through your letterbox?

Contractor accountants who missed the deadline for filing their self-assessment tax return are likely to receive a penalty notice from HMRC in the next few days.

HMRC said it would start sending out penalty notices on the 17th of February to inform late filers that they need to pay an automatic penalty of £100. The Revenue has implemented a new penalty structure this year that could lead to fines of up to £1,600 for people who persistently refuse to file.

However, the ICAEW has been informed that HMRC will cancel tax returns and remove penalties from taxpayers who should not be included in the self-assessment system. Taxpayers who think they are not liable to file self-assessment should call the HMRC helpline and answer a few questions to establish their tax status.

The new penalty system has been widely publicised and there is really no excuse for missing this year’s deadline, especially as it was extended by 2 days due to industrial action at Revenue call centres. For the first time, HMRC said people would face the £100 penalty even if they had no tax to pay. It appears that the government has now had a change of heart and is prepared to remove those individuals from its penalty system.

Earlier this month the Revenue announced it was to clamp down on people who failed to file, especially those who should pay higher rate tax. It is therefore vital that anyone who believes they should not be included in self-assessment contacts HMRC and gets their name removed as soon as possible.

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Should contractor accountants warn about late filing penalties?

ICAS has warned that as many as a million taxpayers could face penalties for late filing of tax returns and claims HMRC has not taken enough measures to notify the public of the changes.

As from the end of this October, anybody who files their paper self-assessment form late, even if it’s only by one day, will receive an instant fine of £100. After three months, the fine will increase by £10 for every day overdue. Even larger fines will be levied if filing is six months late.

It may be time for accountants for contractors to be at the forefront of reminding people!

The same rules will apply to people who file online as from January 31st 2012. ICAS has calculated that an online return due for filing at the end of next January, but held back until August 5 2012, would attract at least £1,300 in fines.

Since self-assessment began in 1997, almost one million people file their return late each year and many of them delay by more than 12 months. Until now, HMRC could not charge a penalty as long as the taxpayer paid all the monies owing.

ICAS’ director of tax, Derek Allen, said he was concerned that the majority of people are not aware of the new penalty regime as it has not been widely publicised.

The Scottish Institute also warns that some people could miss out on tax rebates. Self-employed people in the construction industry often have their tax deducted by the contractor initially and repayments are calculated after they have lodged their return. However, if they file late, the repayment is likely to be a lot less than the fine.

Small businesses and limited company contractors are also becoming increasingly tardy in filing their year end accounts with Companies House. The executive agency recently reported that 12,739 businesses were fined for late filing last month; up from 12,154 in May.

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Filing penalties concern accountants for contractors

The Low Income Tax Reform Group has warned that this month may not be as quiet in the tax world as people would expect.

The January 31st deadline for filing online self-assessment tax returns has now passed and many taxpayers will be sitting back and relaxing. However, HMRC will start issuing penalties this month to taxpayers who missed the deadline.

Anybody who receives such a demand from the Revenue might want to seek the professional advice of a contractor accountant after the LITRG said that a fine could be overturned on appeal.

The penalty for late filing is £100 but there are instances where a fine could have been inappropriately issued, a spokesman from the Group explained. If you believe that you met the 2009 – 10 filing deadline and receive a penalty notice, you only have 30 days in which to lodge an appeal. It is also possible that an appeal might be successful if you had a reasonable excuse for missing the deadline.

The Revenue is currently under a lot of pressure to collect as much money as possible. As we have seen in recent months, its systems are not infallible, and the department has been in hot water due to the coding error debacles and more recently the ‘loss’ of employee PAYE contributions.

If you have any doubts relating to correspondence received from the department, including penalty and coding notices, it is in your best interests to get professional advice as soon as possible.

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