Taxpayers and business owners who file their self-assessment forms late are being warned of new higher penalties that take effect from 1 January 2012.
Missing the January 31 deadline previously cost £100 with a further £100 due for returns that were six months late.
From this January the six month penalty for late submission will cost at least £1,300 even if the tax itself has been paid on time.
On top of the existing £100 late filing penalty HMRC will now charge an additional £10 per day for late returns up to a maximum of £900. Where returns remain unfiled at 31 July an additional charge, being the greater of either £300 or 5% of the tax due, will be applied.
Tom Roseff, senior tax manager at Saffery Champness in Harrogate, said:
Under the new penalty regime perhaps the most basic piece of tax planning will be to ensure that the self-assessment tax return is submitted on time as failing to meet the due date can result in significant costs.
Liaising early with your accountant or tax advisor will also allow the full range of tax planning opportunities available to individuals to be considered. Well timed advice should not only mitigate the risk of these new late filing penalties being suffered but also ensure that tax is not being overpaid.
