Penalties for late-filed Tax Returns will rise nearly 10-fold for some late filers with effect from the 2011 Returns. It is now vital to ensure that your Return is filed on time, i.e. 31st January 2012 for a 2011 Return filed online, in order to avoid the onerous new penalty regime. There is still the initial £100 fine for filing late, but this will be joined by a further £10 per day after 3 months, up to a maximum of £900, and additional penalties are levied for the late payment of the tax liability. These range from an initial charge of 5% of the outstanding tax bill after one month, and 10% of the tax bill after six months. All these charges are in addition to the 3% per annum interest levied for the late payment of the tax liability.
Another difference between this regime and the previous one is that these late filing penalties will be levied even when the Return indicates a nil liability, previously it has been possible to avoid the penalties by simply paying the tax due before the filing deadline.
