More self-assessors at risk of HMRC penalties
Contractors who complete a 2013/14 tax return are being warned that paper versions received by HM Revenue & Customs after midnight on October 31st will attract a £100 penalty.
Addressing the 11million or so people who will self-assess for the period April 6th 2013 to April 5th 2014, HMRC said such a sanction could hit them on Nov 1st even if no tax is due.
That’s because the £100 automatic penalty, which ratchets up after three, six and twelve months, is just for late-filing, so it can be levied even if people actually pay their tax on time.
Accountants suggest that the complexity of the penalty regime will this year catch out the record number of people who are required to self-assess with the taxman.
Chas Roy-Chowdhury of tax body the ACCA said: “Self-assessment has been with us for a long time now, but the government are bringing more and more people into self-assessment through the changes to child benefit. The result of this is more people are at risk of being caught by the penalties.”
According to the taxman, if individuals are unable to submit a paper return by Oct 31, and they wish to avoid a £100 penalty, they can register to file their return online by Jan 31st.
But as well as the £100 fixed penalty, there are penalties for paying late - of five per cent of the tax unpaid at 30 days, six months and 12 months. There are also fines for submitting incorrect information.
All of the penalties can be enforced simultaneously, meaning filing late, paying late and having an irregularity in the return could land the taxpayer with all three kinds of penalties.