News

February 28, 2012

Half a million more tax returns filed on time as penalties rise

Half a million more self-assessment tax returns were filed on time this year than 2011, HM Revenue & Customs (HMRC) has revealed, following the introduction of a new penalty system, writes Georgina Harris.

However, figures from HMRC also showed that 850,000 people still filed their returns after this year’s 2 February deadline – and will receive automatic fines of £100. The tax body is currently sending penalty notices to these late filers.

Under the new regime of fines that began this year, those that don’t file their returns on time – whether they owe any tax or not – will face the £100 penalty. In addition, after 90 days HMRC will fine late returners an additional £10 a day.

Businesses can avoid fines by giving a ‘reasonable excuse’ for failing to submit their tax return such as serious illness and family bereavement. HMRC also accepts some IT issues as reasonable – such as a failure in the HMRC computer system or a computer breakdown just before or during the preparation of an online return.

However, HMRC said that some excuses, such as finding “the online system too complicated” or a business that “left everything to [an] accountant to do and they let you down” were not acceptable.

“We want the returns, not the penalties,” said HMRC spokesman Stephen Banyard. “So anyone who still has not sent theirs should do so as soon as possible.

“People who receive a penalty notice should act now to avoid further penalties. They should send in their return, appeal if they think they have a reasonable excuse, or contact us if they think they should not have been in self-assessment.”

Firms which have received a penalty, but that want to appeal can do so in writing by 31 March.

• Appeal against a self-assessment decision
• Self-assessment tax returns