Individuals and small businesses have long been advised to use the services of online accountants to ensure that their tax affairs are always in good order. However, this recommendation could become even more worthy in future years, thanks to the recently-announced intentions of HM Revenue & Customs to hike the financial penalties imposed for tax returns submitted later than the usual October 31 annual deadline.
The penalty rises will occur from 1 August this year, and are apparently intended by HMRC to encourage the more swift filing of tax returns. The tamest punishment for a late tax return will see a day’s lateness incur a £100 penalty even if the taxpayer in question is not required to pay any tax that tax year or is already up-to-date with their payments. Meanwhile, any tax return three months late will incur a £10 fine for each following day up to a maximum of 90 days, alongside the aforementioned £100 penalty.
In more serious cases, if a tax return is six months late, all of the aforementioned penalties will be incurred along with an additional penalty worth £300 or 5% of their due tax – whichever is higher. This same penalty will be issued again if the tax return is twelve months late. Finally, a taxpayer will have to pay up to 100% of their due tax if their tax return is more than a year late.