Tax Return Penalty

1 March, 2019

Tax return penalty notices should have been sent out by now but HMRC has announced that it has decided to delay sending late self-assessment penalty notices due to Brexit. This could see some of the 731,186 taxpayers, who missed the deadline, paying additional penalties on top of the initial £100 late filing penalty. The letters informing taxpayers that the tax return penalty has been charged are normally issued in February, but this year HMRC will not start the process of issuing those penalties until April 2019.

HMRC say that the latest date that a late tax return filing penalty for 2017/18 tax returns will be issued is 30 April. But it can take over a week for a letter from HMRC to arrive, so the taxpayer may not realise that their tax return has not been received by HMRC until some time in May. Many taxpayers will also be away on holiday in late April due to the Easter bank holidays.
The £100 penalty is still be due, but the taxpayer won’t know that it has been charged to their tax account. It is not yet clear whether the taxpayer’s online personal tax account (PTA) will show the late filing penalty.

If a tax return is over three months late, i.e. not logged as received by HMRC by 1 May, daily £10 penalties are charged for every additional day the return is late, until the return is six months late. Then another automatic late filing penalty is issued, at the rate of £300 or 5% of the outstanding tax, whichever is the greater sum.
Some taxpayers may not be aware that their tax return has not been received by HMRC until the tax return penalty notice arrives as there can be technical problems with online filing which means the electronic tax return is held in suspension as the “submit” stage has failed.

Blog post by: Ian Marlow

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