Late Returns decline due to tougher penalties

The numbers filing late tax returns in the UK have dropped 21% since HM Revenue & Customs introduced harsher penalties for late submissions.  

In the 2010-11 HMRC issued 1.6m late penalties, and in 2011-12 this dropped to 915,000 according to figures obtained by Bloomsbury Professional

The drop coincides with HMRC’s new penalty regime which came into effect in the tax year ending March 2012. 

The new penalties mean that returns filed even 1 day late incur a fee of £100 even if there is no tax due and a penalty of £10 for each subsequent day.  Prior to this, the £100 fine for late submission would be waived if no tax was due and returns more than six months late would receive just an additional £100 fine.

Martin Casimir, MD at Bloomsbury said;

“Judging by the big drop in penalties issued, it appears that HMRC’s new system is working well in reducing the number of taxpayers who fail to file their returns on time.”

“In the past HMRC has been fairly lenient towards late filers, with offenders being fined no more than £200 for their late return, but the price to pay for late filing is now bigger than ever and taxpayers are aware of this.”

Happily for the taxman, despite the reduced number of penalties issued, the revenue collected from the fines has not necessarily decreased fallen since the value of fines now being issued are significantly higher than under the old penalty system.

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