New penalties for late filing of tax returns

If you haven't yet filed your 2010/11 tax return, make sure you do so electronically!

New penalties introduced by HM Revenue & Customs mean that you can now be penalised for filing a 2010/11 tax return on paper – even though the filing deadline isn’t until the end of January next year.

The £100 late penalty for filing a Self Assessment tax return late has been around for several years. Previously, it was possible to avoid the penalty by just making sure that your tax liabilities were settled in full by 31 January – the filing deadline. However, this is no longer the case and any ‘late’ returns will result in a penalty even if the tax is fully paid.

This also means that tax returns filed on paper will now automatically carry a penalty, as the deadline for submission of paper returns (for 2010/11 returns) was 31 October 2011.

It is still possible to file a tax return electronically – you have until 31 January 2012 to file your 2010/11 tax return online – but this will not prevent a penalty if a paper return is submitted after 31 October. In other words, it is not possible to remove a penalty for filing a late paper return by filing a ‘replacement’ return electronically, before 31 January.

There are also new, substantial penalties for late returns which are more than 3 months overdue – again, even if no tax is actually due – and for the late payment of tax.

And whilst it is still possible to file your tax return online, you will need to register with HM Revenue & Customs in order to do so if you haven't filed online before - we strongly recommend you don't leave this until the end of January!

If you need help with filing your tax return – particularly in light of these recent changes – then please feel free to contact us.