New tax return penalties being sent to half a million non-filers

The number of outstanding returns has almost halved in 2012, down to 5.9 per cent, compared to 10.7 per cent in 2011. This means 518,000 fewer penalties are being issued. HMRC has also taken 273,000 people out of Self Assessment this year.

New penalties were introduced in April 2011 to boost the incentive to file and reduce the costs to taxpayers of chasing up missing forms. As a result, anyone who ignores their Self Assessment filing obligations is now liable to higher penalties than in previous years.

The penalties being issued from today will be for a minimum £1,200, comprising:

• the maximum £900 in daily penalties for non-filing
• a further late-filing penalty of £300 or 5 per cent of the tax due (whichever is higher).

People who receive a late-filing penalty can appeal against it if they think they have a reasonable excuse for not sending their tax return; for example, a family illness or bereavement.

Anyone who has received a late-filing penalty and has not sent in a return, but thinks they don’t need to be in Self Assessment, can still potentially apply to be taken out of Self Assessment. They can visit www.hmrc.gov.uk/sa/need-tax-return.htm to check what to do if they think they don’t need to be in Self Assessment. If HMRC agrees, the return and any penalty will be cancelled. 

HMRC’s Director General for Personal Tax, Stephen Banyard, said: “We want the returns, not the penalties. This year, half a million more people have filed their return – which means we are issuing 44 per cent fewer penalties. 

“But, despite several reminders, nearly six per cent of people have not sent their 2010/11 tax returns to us and they’ll be getting a penalty.

“Where someone has a reasonable excuse for not sending a return on time, we will waive the penalty. We also recognise that there will be some people within this group who don’t need to be in Self Assessment, and we will be happy to remove them from the Self Assessment system and cancel their penalty.”

The penalties being issued over the next few weeks are in addition to £100 late-filing penalties for missing the 31 January filing deadline, which were sent out in late February and early March.

Notes for editors

1. The new penalties for late Self Assessment returns are:

• an initial £100 fixed penalty, which now applies even if there is no tax to pay, or if the tax due is paid on time;
• after three months, additional penalties of £10 a day, up to a maximum of £900;
• after six months, a further penalty of 5 per cent of the tax due or £300, whichever is greater; and
• after 12 months, another per cent or £300 charge, whichever is greater.

2. There are also additional new penalties for paying late of 5 per cent of the tax unpaid at: 30 days; six months; and 12 months.

3. Further information on the new penalties is available from the HMRC website at http://www.hmrc.gov.uk/sa/deadlines-penalties.htm 

4. Follow HMRC on Twitter at: @HMRCgovuk

5. Images are available on HMRC's flicker channel www.flickr.com/hmrcgovuk