A new tax change will come into effect this month which is set to impact “hundreds of thousands of people” who have still not submitted their Self Assessment tax return
HM Revenue and Customs (HMRC) has introduced a new £10 daily late filing fine for people yet to submit their Self Assessment tax return, with experts flagging the enforcement could affect “hundreds of thousands of people”. Alastair Douglas, CEO of TotallyMoney, warned: “While the initial £100 fine might not have been enough to encourage some to get going, from today, HMRC will start charging late filers an extra £10 per day.
“This is on top of the eyewatering 8.5 per cent late payment interest rate on outstanding balances.” He further warned that procrastinators faced severe penalties if they didn’t act swiftly.
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Alastair said: “If in three months’ time you still haven’t filed your return, the taxman will hit you with a penalty of 5 per cent of the tax due or £300, whichever is greater.
“Any penalties need to be paid within 30 days, and can be done in several ways, including Direct Debit, bank transfer, or by cheque.”
Mr Douglas also highlighted that there are options for those who cannot pay immediately: “If you have a ‘reasonable excuse’ you can challenge your penalty, and reasons include the death of a close relative, serious illness and issues with HMRC’s online services.
“If you’re struggling to pay your bill in full, then head over to the HMRC website, where you might be able to set up a payment plan, under a ‘Time to Pay’ arrangement.”
Claire Trott, head of advice at St James’s Place, echoed the sentiment, stating “pressure is rising” for tax dodgers dragging their feet, reports the Daily Record.
Tax expert Ms Trott has issued a stark warning to those dragging their feet on their tax returns: “While completing a tax return is often a dreaded task, and one may choose to put it off, getting it sorted now could save you from significant financial penalties down the line.”
She added: “Up until now, late filers have faced a one-off fine of £100, but from today the consequences will become even greater. The £10 a day penalty will continue for 90 days, potentially adding up to £900 if the return is not submitted during this period.
“Further penalties of 5% of the tax due or £300 (whichever is greater) will apply at both the six month and 12 month mark for those who still haven’t filed.”
Ms Trott emphasised that anyone registered for Self Assessment must submit a return regardless of whether they owe tax, urging them not to ignore HMRC’s reminders.
She also pointed out that while filing your tax return today won’t negate any fines already incurred, it will certainly halt additional charges.
Ms Trott advised: “The quickest and simplest way to do this is to complete HMRC’s online form. While the process may seem daunting, there are plenty of tips and guidance available on the HMRC website, and if your finances are particularly complex, speaking to a financial adviser is always a good option for those who are able.
“With today’s penalties likely to cause alarm for those who are unaware, the most important thing is not to rush the return process as this could cause you to leave out vital information that could result in paying more tax than necessary.
“There are a number of details – such as gift aid payments, and necessary work expenses – that can be easy to forget about when filing a return but can amount to significant tax relief. It’s important to take time to include all relevant information to ensure you receive the full tax relief you’re entitled to.”