Accountants have been urged to ensure that they file their tax returns on time ahead of the introduction of fines for those who miss the deadline.
From 17 February, HM Revenue & Customs (HMRC) will fine taxpayers who fail to file their tax returns for the fiscal year 2010/2011 on time. Previously, HMRC had not penalised those who had missed the self-assessment deadline if they did not owe tax, but it has decided to fine late-filers £100 for missing this year's deadline (3 February) and then £10 a day from 1 May for 90 days up to a maximum of £900.
If a taxpayer fails to complete a return after six months there is a further £300 penalty, or a fine of 5% of the tax due if that results in a higher figure. After a year, another fine of £600, or 10% of the tax due, will be issued. With fines no longer capped at tax owed, taxpayers could be docked up to £1,600 even if they owe no tax or are due a refund from HMRC.
Anita Monteith, ICAEW's technical manager of SME and personal tax, told Accountacy Age: "It is important that late filers do not ignore the penalty notice. HRMC will make contact repeatedly by letter and by phone for the rest of February and March to urge late filers to avoid incurring the daily penalties."
Last year, 14% of taxpayers were late filing their return, with 11% failing to submit their return six months later.