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Recent Articles
- HMRC announce Alternative Tax Dispute Resolution trial for Small and Medium Companies
- HMRC Compliance checks into direct tax avoidance schemes
- HMRC announce new Offshore Tax Co Ordination Unit
- Construction Industry Scheme (“CIS”) Penalties Overhaul
- Tax Health Plan – Update
- Real Time Information for PAYE/NIC will Crash & Burn
- HMRC warn about PAYE/NIC Errors on end of year forms
- Another Tax Disclosure Opportunity – mmmmmmmm!
- HMRC Powers increased in relation to PAYE/NIC
- Pay As You Earn Settlement Agreement payments
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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.
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HMRC have gradually been introducing various penalty changes and “in year” late payment penalties are something new for this tax year but there has been very little publicity about this latest addition to the employer compliance review/tax investigation/Construction Industry Scheme review regime.
So what does this actually mean from both a PAYE/NIC compliance and CIS compliance perspective – well, it means there are no opportunities to hold onto monthly PAYE and CIS payments to HMRC to aide cashflow and then catch up at the year end. Now paying late will register a default and these defaults will be tracked throughout the year and then only after the end of the tax year will penalty notices be issued – because let’s face it this is when HMRC can obtain the highest yield from you. It has already been confirmed that they won’t issue the notices “in year” so don’t think that you have got away with it because it will be stored up for the end of the tax year and then bang, the penalty notices will arrive.
Statistically HMRC will be looking for unusual remittance patterns so don’t go down the misguided route of thinking “how will they find out?” because you’ll be walking into the next stage of the the new compliance regime that of “real time record reviews”. Keep reading for further updates on this very important development …