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Her Majesty's Revenue & Customs (HMRC) are responsible for applying the law in the case of Taxation and there is a great deal of information available on their web site. What we provide here is an outline of the important issues regarding the penalties that will be applied in cases of default
Dates to Note - here are the important dates you should note to avoid being in default of the tax law
31st October - deadline for paper returns if you wish HMRC to calculate your tax liability
31st January - deadline for returns, whether on paper or via the internet and on which you will have calculated your tax liability yourself. If you are self employed you will also be required to make a payment of tax and Class 4 National Insurance that clears the balance outstanding of any charges from the previous tax year plus 50% of the calculated tax for the current year of return
31st July - deadline for making the remaining 50% of tax due for the current year of return
Late Tax Return - £100. A further £100 penalty is incurred if the Return is still not made by the following 31st July and HMRC can make a charge of up to £60 per day beyond that date. If the Return has not been made before the following 31st January (a year late) they can penalise you up to 100% of the tax that should have been paid had the Return been on time. All this adds up - the answer is
GET YOUR RETURN IN ON TIME
Late Payment - interest is charged by HMRC from the date the payment was due to the date it is received by HMRC. The rates that they will charge are available from
http://www.hmrc.gov.uk/rates/interest.htm
Late Payment Surcharge - HMRC can also make a further charge, that will also incur interest if unpaid, if the tax due is unpaid after 28 days following the due dates, ie 28th February and 28th August. This charge is 5% of the tax due and if it is still not paid within 6 months of the due dates a further 5% of the amount unpaid will be added. This all adds further to what you will have to pay so
MAKE YOUR PAYMENTS ON TIME
See also
Comments and suggestions for improving this site are appreciated and should be addressed to administration
Last Update 01-Mar-2010
Date first published 18-Dec-2005