Taxpayers 'sleepwalking onto fines escalator'
Contractors are among the taxpayers facing penalties of £10 a day up to a maximum of £900 if they have not yet filed their 2012 tax return by yesterday (May 1st), an accountant warns.
These fines are non-refundable even if it turns out that no tax is due – and even heftier sums are imposed if the return is still outstanding at the end of July, says accountancy firm Reeves.
Tax partner Geraint Jones believes that many people are unaware of the costs of missing the deadline for tax returns, quite apart from the steep “fines escalator” that follows.
“In addition to the [prospect of paying a fine of] £900, a penalty of £100 will already have been imposed for simply missing the 31 January deadline in the first place,” he added.
“If the taxpayer still has not filed by the end of July, a further fine of £300 or five per cent of tax due whichever is greater, will be raised, with the same fine compounded again six months later.”
The accountant warned that HM Revenue & Customs is unlikely to accept many excuses. Mr Jones explained: “There is huge pressure on the system to act efficiently, particularly in the current economic climate, and that means making sure people file on time.
“What is clear to us is that many people are sleepwalking into fines, either unaware of the deadline or the risks they face. There are really no acceptable excuses as far as HMRC is concerned”.