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HMRC issues additional penalty notices to 2010/11 ‘non filers’

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The number of outstanding tax returns has almost halved this year, HMRC said as it prepared to send additional penalty letters to almost half a million people who have not yet filed their 2010/11 return which was due by 31 January 2012.

The new penalty regime introduced in April 2011 provides for an initial £100 fixed penalty for missing the 31 January filing deadline; after three months, additional penalties of £10 a day up to a maximum of £900; after six months, a further penalty of 5% of the tax due or £300, whichever is greater; and after 12 months a further tax-geared penalty.

'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% of the tax due (whichever is higher).'

HMRC press release 14 August 2012

Tax experts questioned HMRC’s decision to offer favourable penalty terms to taxpayers with outstanding returns for 2009/10 or earlier who file and pay their tax and NICs by 2 October 2012.

George Bull, Senior Tax Partner at Baker Tilly, said last month that HMRC’s ‘belated attempt’ to secure completion of returns begged the question ‘why HMRC hasn’t already pursued the recalcitrants’.

He added: ‘We also have doubts as to whether this amnesty is actually fair. The page on the HMRC website detailing the amnesty suggests that people who sign up … may be treated more leniently than those who have already filed late for any of those years and were charged interest and penalties. That’s a bit like retailers offering better terms to new customers than long-standing, loyal customers.’

HMRC has taken 273,000 people out of self assessment this year.