HMRC have come out fighting when it comes to filing self assessment returns on time. The £100 late filing penalty is to be dispensed with and from October 2011, the last date for filing a paper return for 2010-11, four penalties now apply:
• From day one: you will be charged a £100 penalty even if you have no tax to pay or you have paid any tax due.
• From 3 months late: you will be charged an automatic daily penalty of £10 per day up to a £900 maximum.
• From 6 months late: you will be charged additional penalties which are the greater of 5% of tax due or £300.
• Over 12 months late: again additional penalties based on greater of 5% of tax due or £300. In serious cases this penalty may be increased up to 100% of tax due.
These penalties will be applied after 31 January 2012 as HMRC will assume that you are going to file online if you miss the paper filing deadline of 31 October 2011. Posting a paper return after 31 October 2011 will automatically trigger the new penalties.
