News

August 17, 2012

HMRC sends out tax return penalties to 500,000 non-filers

Around half a million people who still haven't sent their 2010/11 tax returns to HM Revenue & Customs (HMRC) will receive additional penalty letters from this week.

The number of outstanding returns has almost halved in 2012, down to 5.9%, compared to 10.7% in 2011. This means 518,000 fewer penalties are being issued. HMRC also reports that it has taken 273,000 people out of Self Assessment this year.

However, anyone who ignores their Self Assessment filing obligations is now liable to higher penalties than in previous years. The new penalties were introduced in April 2011.

Those penalties will be at least £1,200 — with the maximum of £900 in daily penalties for non-filing and a further late-filing penalty of £300 or 5% of the tax due (whichever is higher).

People who receive a late-filing penalty can appeal if they think they have a reasonable excuse for not sending their tax return; for example, a family illness or bereavement.

In addition, anyone who thinks they don't need to be in Self Assessment, can still apply to be taken out of Self Assessment. They can visit www.hmrc.gov.uk/latetaxreturn if they think they don't need to be in Self Assessment. If HMRC agrees, the return and any penalty will be cancelled.

HMRC's director general for personal tax, Stephen Banyard, said: "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. But, despite several reminders, nearly 6% of people have not sent their 2010/11 tax returns to us and they'll be getting a penalty."

The latest penalties are in addition to £100 late-filing penalties for missing the 31 January filing deadline, which were sent out in Spring 2012.

Meanwhile, HMRC's chief executive, Lin Homer, has announced the recruitment of up to 1,000 additional contact centre staff, to achieve a target of answering 90% of all calls.

HMRC plans to reach the call centre industry standard two years earlier than it originally promised to Parliament's Treasury Select Committee. Lin Homer said: "Our contact centres receive around 60 million phone calls a year. It is vital that when customers call us for help their call is answered — and in a reasonable time."

• Tax self-assessment