TT168: New Penalties Regime

October 23, 2011

Filling in and filing your personal tax return on time has become more important as HMRC have introduced a new regime of penalties that could see penalties of £1,600 or more for late filed tax returns.

As a brief reminder, the filing deadlines are as follows:

31 October: all paper returns If you send a paper tax return it must reach HMRC by midnight on 31 October following the end of the tax year.

31 January: online returns Your online tax return must reach HMRC by midnight on 31 January following the end of the tax year.

(There are exceptions if you were issued with a notice to deliver a tax return late in the year but as these are exceptions, we won’t look at this here).


The old penalties regime:

This was relatively mild. There was a penalty for late filing of £100 but this was waived if there was no tax to pay or a refund, or all tax owing was paid by the 31 January.


The new penalties regime:

This is a lot tougher and, most importantly, whether you owe tax or have paid it all is not considered. If you are late, the penalties apply regardless and the longer the delay, the higher the penalties.


Length of Delay Penalty You Will Have To Pay
1 day late A fixed penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.
3 months late £10 for each following day – up to a 90 day maximum of £900. This is as well as the fixed penalty above.
6 months late £300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.
12 months late £300 or 5% of the tax due, whichever is the higher. In serious cases you may be asked to pay up to 100% of the tax due instead. These are as well as the penalties above.


Remember that the penalties will start to accrue on 1 November if you file a paper tax return and on 1 February if you file on-line



Mrs A’s tax return is filed on-line and so is due on 31 January 2012 but HMRC don’t receive it until 6 June 2012.

Mrs A will have to pay all of the following:

  • £100 fixed penalty
  • £370 penalty – this is £10 each day from 1 May to 6 June.

This is a penalty of £470 and under this regime, a penalty of £1,600 could be incurred even if there was NO tax to pay.


Having a reasonable excuse for missing the deadline

You won’t have to pay a penalty if you have a “reasonable excuse” for missing the deadline but HMRC take a notoriously tough line on what they consider to be ‘reasonable’, requiring what most people would think of as ‘exceptional’ circumstances.

Now, more than ever, it will pay to get your tax return in on time, so if you are in any doubts about what to do, seek help from your Barnes Roffe LLP contact partner.

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