Revenue & Customs set to issue penalty letters to around 500,000 people who have not filed tax returns for 2010/2011
Around half a million people who still have not filed tax returns for the 2010/11 tax year are about to receive fines of at least £1,200 as HM Revenue & Customs sends out its latest round of penalty letters.
Revenue & Customs said the number of outstanding returns was down almost half on 2011’s figure and represented just 5.9% of self-assessment taxpayers compared with 10.7% last year. However, those who did miss the 2 February 2012 deadline face higher penalties than in previous years. Anyone who failed to get a tax return in on time faced a fixed £100 penalty even if there was no tax to pay, and will have received notice of that in the spring.
The latest penalty notices are sent to those who then failed to act and comprise a £900 fine applied after three months and a six-month penalty of £300, or 5% of the outstanding tax, whichever is greater. Those who fail to act before a year has passed face an additional fine of 5% of what they owe, or another £300.
On top of these penalties are extra charges for not paying the tax on time. A month after the deadline the fine is 5% of the outstanding bill, after six months an additional 5% is added and after 12 months another 5%. Revenue & Customs said people who received a late-filing penalty could appeal against it if they thought they had a reasonable excuse for not sending their tax return, such as a family illness or bereavement.
Those who thought they should not be in self assessment could apply to be taken out and have the penalty cancelled. So far 273,000 people have been removed from self assessment this year.
HMRC’s director general for Personal Tax, Stephen Banyard, said: “We want the returns, not the penalties. This year, half a million more people have filed their return – which means we are issuing 44% fewer penalties.
“But, despite several reminders, nearly 6% of people have not sent their 2010/11 tax returns to us and they’ll be getting a penalty.”