A Lichfield accountant is warning of the new penalties for late tax returns.
HM Revenue & Customs made the change to the fines from April 6.
And Paul Bulzacchelli, managing director at Lichfield-based Inspired Accountants, warned people not to be caught out by the new penalties.
He explained:
“The new tax year brings with it harsher fines and penalties from HMRC as they believe the former £100 penalty failed to act as a big enough deterrent. The new penalty increases over time and so is designed to get people to submit self-assessment tax returns as soon as possible, as the greater the delay, the greater the penalty.”
Under the previous system the maximum penalty for filing a late self-assessment tax return was £100, with interest being added on the outstanding tax payment.
The new system charges £100 on the first day of late submission with a daily penalty of £10 per day being charged after three months. Further penalties will be incurred if the self-assessment tax return is outstanding after six months and then a year later, with a maximum penalty of £1,300 now possible of being incurred. The penalties for the late payment of tax include an initial penalty of five percent of the unpaid tax after 30 days and further penalties at six months and a year if it remains unpaid.
Paul added:
“Penalties will be automatically sent to all self-assessment taxpayers who do not file and pay on time. Taxpayers will be able to appeal against a penalty on the grounds that they have a reasonable excuse for not complying on time.
“I would strongly recommend that anyone needing to complete and submit a self-assessment tax return to seek advice from a chartered accountant, to not only ensure they comply with filing and payment deadlines, but to ensure that they do not pay any more income tax than is necessary.”
