Avoid late filing and payment penalties

It was well publicised that HMRC expected a windfall of up to £600 million as a result new late filing rules introduced last year. The new rules resulted in penalties being charged, even if taxpayers do not owe any tax!

For ease of reference, we have detailed key payment dates and filing deadlines for you below. If you require any assistance with the completion of your 2011/12 Tax Return or any earlier years, please contact us at the earliest opportunity.

The filing deadlines for 2011/12 UK Tax Returns are as follows:

31 October 2012: – If you are filing a hard copy paper return;

31 January 2013 – If you are filing your Return on-line.

You may have an extension to the above dates if you have only just been notified a Tax Return is required.

There’s an earlier deadline of 30 December if you want HMRC to collect any tax due through your PAYE (Pay As You Earn) tax code. You can only ask for this if you owe less than £3,000.

If you are unsure whether or not you have to file a tax return, our on-line tool should help you decide: “Do I Need to Complete A Tax Return

If you do need to complete a Tax Return for 2011/12 but have not notified HMRC you should do so at the earliest opportunity. You will then be issued with a tax reference and will hopefully still be able to meet the filing deadline.

Late filing penalties apply in respect of the 2011/12 Tax Return, as follows:

Length of delay Penalty you will have to pay
1 day late A fixed penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.
3 months late £10 for each following day – up to a 90 day maximum of £900. This is in addition to the fixed penalty above.
6 months late £300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.
12 months late £300 or 5% of the tax due, whichever is the higher. In serious cases, you may be asked to pay up to 100% of the tax due instead. These are as well as the penalties above.

Tax Repayment

If you have overpaid your tax and are due a refund this is normally received within two to four weeks of filing your Return.

As of 27 January 2009, the rate of interest paid by HMRC in respect of overpaid tax has been a meagre 0%. If you are owed a repayment it makes sense to file your Return at the earliest opportunity.

Deadlines for Paying Your Tax

31 January 2013

You must pay any tax you owe for 2011/12 by 31 January 2013.

The payment deadline is the same for both paper and online returns.

You will need to pay one or both of the following:

  • any tax you still owe for 2011/12, the ‘balancing payment’
  • the first of two ‘payments on account’ towards your 2012/13 liability, where appropriate.

31 July 2013

This is your deadline for making any further payments on account towards 2012/13, where appropriate.

The following surcharges (separate to the penalties as above) will apply if you pay your tax late:

Length of delay Penalty you will have to pay
30 days late 5% of the tax you owe at that date i.e. if any part of the balancing payment due on 31 Jan is not paid by 1 March.
6 months late 5% of the tax you owe at that date (in addition to the 5% penalty above) i.e. if any part of the balancing payment due on 31 Jan is not paid by 31 July.
12 months late 5% of the tax still unpaid at that date (in addition to both 5% penalties above) i.e. if any part of the balancing payment due on 31 Jan is not paid by the following 31 Jan.

The late payment penalties do not apply to any payments on account that you pay late.

Interest charges if you pay late

You will have to pay interest (currently 3%) on anything you owe and haven’t paid, including any unpaid penalties, until HMRC receives your payment. Surcharges will also start to attract interest if they are not paid within 30 days.