HMRC could raise more than £70m from the penalties handed out for late submission of tax returns this year, according to analysis by law firm Irwin Mitchell report Harris & Co accountants Northampton.
The latest HMRC figures indicate 10.74 tax returns were issued for the tax year ending 5 April 2013, of which 93.4% came in on time, meeting either the 31 October 2013 date for paper submissions or the 31 January 2014 deadline for using the online service.
The remaining 708,840 returns which failed to hit either deadline are now liable for an immediate £100 penalty each, which according to Irwin Mitchell should see HMRC receiving £70.88m.
Phil Berwick, tax and investigations partner at Irwin Mitchell said:
‘The number of those required to complete self assessment forms rose by more than a million this year swollen by changes to child benefit which required around 630,000 parents to repay money through the tax system. This together with late filing is a real money spinner for HMRC.’
In addition to the £100 fine, late returns will also be subject to daily penalties unless they are filed by 30 April 2014. Taxpayers can appeal against the fines, but will need to show they had a ‘reasonable excuse’ for failing to submit the return on time.
Last week HMRC indicated it was unlikely to charge penalties for a small group of taxpayers who did not have the security PIN needed to make an online tax return filing by the 31 January deadline. Those affected would still need to have made a payment of any tax due, but if they either registered for the online service during the period 21 January to 31 January 2014, and so had not received the necessary security codes to use it, or had lost the details, then HMRC said they had until 15 February to make their submission.