850,000 late tax returns

HMRC is to send out 850,000 letters to taxpayers informing them that they are liable for a £100 fine for not filing their tax returns by the deadline of 31 January, reports Harris & Co accountancy services.

The fines incurred are set to raise some £85m. The letters are due to be posted by 20 February, while the £100 penalty applies even if there is no tax due to be paid.

A spokesman for HMRC said:

‘Anyone who hasn"t yet sent their 2011/12 tax return to HMRC will have already incurred a £100 late filing penalty. To avoid any further penalties, they should send their return as soon as possible, as well as paying any outstanding tax due for the 2011/12 tax year.’

‘Non-filers have to file online now to avoid further penalties or contact us to ask to be taken out of self-assessment, and provided they meet the criteria, we will take them out of SA and cull any penalties incurred.’

HMRC said that a record number of 9.61m tax returns came in on time, out of the 10.34m people sent tax returns for the 2011/12 financial year. This represented a 3% increase on last year and meant that 93% of self assessment taxpayers filed their returns on time.

A record 7.93m returns (82.5%) were sent in online, with the remaining 1.68m sent in on paper.

Since the deadline passed a further 60,000 late returns have been received. These self-assessment taxpayers will still be liable for a fine but will stop running up daily penalties and interest once they have filed their returns and paid the tax due.

However, anyone who has still not filed their self assessment tax return and paid all of the tax due faces further fines of £10 a day after the end of April. At the end of July, if the return and tax bill is still outstanding the penalty ramps up to 5% of the tax due and a minimum fine of £300. This penalty is then repeated after a further nine months.

People who receive a late filing penalty can appeal against it if they think they have a ‘reasonable’ excuse for not sending their tax return, such as a family illness or bereavement.

Further details are available from HMRC.