For those of you who have ever missed the 31 January filing deadline for tax returns, you will be aware that HMRC usually issue £100 penalty notices in February where the submission deadline has not been met.
This year, due to strains on HMRC resources as a result of Brexit, these £100 penalty notices which serve both as a prompt that your return is outstanding, and a reminder of the risk of additional £10 per day penalty if your return is still outstanding three months after the 31 January due date, may be delayed until end of April 2019.
HMRC have stated:
“As part of EU Exit contingency planning, we have decided to make a change to the timings for sending notification of Self Assessment penalties. £100 penalty notices are normally issued in February for individuals in Self Assessment who have not filed their online return on time (by 31 January). This creates considerable demand into our call centres and back offices, as customers contact us to consider their options.
This year, we expect an increased demand in our call centres as the UK leaves the EU, so we intend to delay the issue of these notices to ensure we can provide the best service to our customers. This will release those staff for EU Exit related work.
Individuals who filed late will still be charged the penalty; but the notice will be delivered later than normal. We will issue daily penalties to individuals who have still not filed three months after the deadline, in appropriate cases, at the normal time.
The latest date that the notices will go out is the end of April, but they will go out sooner if the Withdrawal Agreement is agreed.”
This represents a significant risk to those who have not yet submitted their tax return for the year ended 5 April 2018 that they will also incur the highly punitive daily penalties. Some individuals may not realise they have missed the submission deadline until they receive the £100 penalty notice and there could then be a very short time frame in which to complete the outstanding tax return before daily penalties commence.
These daily penalties of £10 a day can be levied for up to a maximum of 90 days, resulting in late submission penalties of up to £900 in addition to the automatic £100 late filing penalty regardless of the level of tax liability arising, as well as surcharges for late payment of the tax liability which can also be significant.
Unfortunately HMRC don’t issue a notice for these penalties until the tax return is submitted or until the maximum penalty level has been met, so daily penalties can be accruing without the taxpayer being aware of them.
If you require any support with submitting your tax return or any general tax advice, get in touch with our team by clicking here.