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HMRC sending out Penalty Notices

February 2012

HMRC will start sending out around 850,000 penalty notices for failing to file 2010/11 Self Assessment returns on time. Errant taxpayers will start receiving the notices from 20 February and HMRC will filter them out over the next couple of weeks to ease the administrative burden.

Although the deadline for receiving online returns was 31 January, this year HMRC is not issuing penalties to people who sent their 2010/11 return online on 1 or 2 February, following strike action at HMRC’s call centres on 31 January.
HMRC said the number of SA taxpayers who missed the 31 January deadline has grown rapidly in the last six years. In 2004-05, 876,000 people missed the deadline, rising to more than a million by 2006-07 and reaching 1.4 million in 2009-10.

The new penalty regime was designed to reduce this figure and has the following four elements:
• £100 fine from 3 February (31 January deadline was extended due to HMRC strikes)
• £10 a day fine from 1 May for 90 days – a maximum of £900
• £300 fine on 1 August (or 5% of the tax due if that is more)
• £300 fine on 1 February the following year (or 5% of the tax due if that is more)

The filing date for returns sent in on paper was 31 October, so the dates at which fines apply are also three months earlier than those for online filers.

Fines are no longer capped at the tax owed; therefore taxpayers could face fines of up to £1,600, even if they owe nothing.
The figure of 850,000 penalty notices represents a 36% drop from the 1.4m issued last year, indicating that HMRC has been successful at cracking down on late filing. As previously, some notices will be cancelled this year due to reasonable excuse appeals, but most of those 850,000 taxpayers will be liable for a minimum penalty of £100 this year, reaping close to £85m to help close the government’s budget deficit.

Stuart Coleman, Manager of the Tax Department of ABDS says:

“People who get a late-filing penalty can appeal against it if they think they have a reasonable excuse for not sending back their Tax Return in time, or they think a penalty should not have been issued for any other reason. Appeals should be made in writing by 31 March.”
If you need any help and advice with Corporate or Personal Tax returns, contact ABDS to discuss how we can help.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail:

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