Firm News

New Penalty Regime Introduced by HMRC – Don’t get caught out!

From April 2011 a new penalty regime has been introduced by HMRC for late submission of Tax Returns and late payment of tax and NIC’s.

The penalties for filing a tax return late are:

• Day one: an initial penalty of £100, even if you have no tax to pay or you have already paid all the tax you owe
• Three months late: an automatic daily penalty of £10 per day, up to a maximum of £900
• Six months late: further penalties, which are the greater of five per cent of tax due or £300
• Twelve months late: more penalties, which are the greatest of five per cent of tax due or £300. In serious cases, there will be a higher penalty of up to 100 per cent of the tax due.

Penalties for paying your tax late are:

• Thirty days late: you will be charged an initial penalty of five per cent of the tax unpaid at that date;
• Six months late: you will be charged a further penalty of five per cent of the tax that is still unpaid; and
• Twelve months late: you will be charged a further penalty of five per cent of the tax that is still unpaid.

These penalties are on top of the interest that HMRC will charge on all outstanding amounts, including unpaid penalties, until your payment is received.

Penalties will be automatically sent to clients who do not file and pay on time. We will still be able to appeal against any penalty on the grounds that there is a reasonable excuse for not complying on time.

If you would like further information on any of the above please contact our tax department:

Tel: 029 20734100 or email martink@bpuaccountants.co.uk