Tough new rules in force for people who fail to file their self assessment tax return by the deadline

Workers who fail to file their self assessment tax return on time will face tough new penalties as the government tries to scrape together every penny it can find to pay off the country’s budget deficit. Senders of paper self assessment tax returns received by HMRC after the October 31st 2011 deadline can expect an instant £100 fine, whether income tax is due or not. However, people who file their self assessment tax return online have until January 31st 2012 to get their paperwork in order. Over ten million self assessment tax returns are due in respect of the 2010 – 2011 tax year, and past experience shows that there is bound to be some defaulters. Those who have still failed to file their self assessment tax return after three months of the deadline will be hit by a further penalty of £10 per day, up to a maximum of £900. After six months of failure to supply a self assessment tax return, HMRC will hit defaulters with an additional penalty of 5% of the tax due, or £300, whichever is greater. Finally, after twelve months, people who have still failed to file their self assessment tax return can expect to be charged another 5% of tax due, or another £300, whichever is greater. Peter Lashmar is a tax expert who runs an accountancy firm in Lymington, Hampshire, he said: “Given the financial hardship that the country currently faces, it is hardly surprising that the government is dishing out harsh penalties to those who fail to do what it required in the appropriate time frame. “I have no doubt that the government would prefer it if people submitted their self assessment tax returns online, because this is by far the cheapest method of disclosure for the Inland Revenue.” For independent advice about inheritance tax planning tax returns contact Lashmars at www.lashmars.co.uk