Taxpayers face 'May Day' fines for late payment

HM Revenue & Customs are urging taxpayers to file their online returns for 2010/11 as soon as possible or face a £10 per day late payment charge from 1st May.

About 850,000 people missed the January 31st deadline to file online returns and pay tax due for the fiscal year that ended on 5th April 2011.  Even if no tax is owed, failure to complete the self assessment process means they are liable to automatic fines of £100 each on top of the £10 per day late payment charges. 

HMRC added that 54,000 people were fined £100 for missing the October 31st deadline last year for filing paper returns for the 2010/2011 tax year.

However, they could not confirm how many late returns for that year are still outstanding and therefore how many people face the prospect of being fined £10 a day from May 1st. Under the new penalty system, daily penalties will apply for up to a maximum of 90 days.

Further penalties of at least £300 (or 5% of the tax due, if that is more) will be issued for returns that are between six and twelve months late.

Accountants are warning taxpayers that ignoring the taxman could prove very expensive, as the new penalty system means failure to file tax returns could cost £1,600 in fines, even if no tax is due.

Anyone who’s received a late-filing penalty, hasn’t yet sent a return, but thinks they don’t need to be in Self Assessment should call the helpline on 0845 900 0444. If the taxman agrees, the return and any penalty will be cancelled.

Stephen Banyard of HMRC said:

“We want the returns and not penalties.  So, if you haven’t yet sent us your 2010/11 return, you need to do one of two things urgently – either send it online by April 30th, or call us if you think you shouldn’t have to complete one.”

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