If you’re required to file a tax return, you need to act quickly to meet the 31 January deadline, to avoid triggering a hefty late penalty.
While the cut-off for filing on paper for the 2010-2011 tax year passed on 31 October, you can still file online up to midnight at the end of 31 January 2012.
But it’s vital not to leave it until the last minute, as a tough new regime has been introduced for late-payers.
Under the new rules introduced by HMRC in April 2011, non-submission of a tax return could result in financial penalties of up to £1,600.
Stricter regime
Until this year, anyone who filed their self-assessment forms late automatically had to pay a £100 penalty, but that charge was quashed it if was later found you owed no tax at 31 January.
Under the new rules, anyone who files late – either on paper or online – now attracts a £100 penalty, and that will apply, even if you have no tax to pay.
Additional penalties
After this initial £100 charge, a series of penalties now apply.
If you have not filed after three months, daily penalties of £10 will start to accrue, capped at £900, or 90 days.
If you are six months late, a further penalty of £300 or 5 per cent of the tax due is applied, whichever is greater.
If the return has not been submitted within 12 months of the deadline, there will be another charge of £300 or 5 per cent; in serious cases, HMRC also reserves the right to apply a penalty equal to 100 per cent of the tax at stake.
Act fast
If you are planning to file online, you need to act fast to avoid unnecessary penalties and charges.
Crucially, your online tax return must reach HMRC by midnight on January 31 2012 – there is no day’s grace this year.
“Anyone who is liable for self-assessment and who has not yet registered to file online needs to do so as soon as possible,” says Tina Riches at the Chartered Institute of Taxation (CIOT).
“HMRC says it may take up to 10 days to process the registration, and you cannot submit your return until this has been done. Time is running out for self-assessment taxpayers who want to avoid HMRC’s new penalty regime.”
Get your affairs in order
Check now that you have all the information to complete your tax return.
“If you need to ask an employer for details of last year’s earnings (P60 form) or benefits (P11D form), or if you need to ask the bank for details of interest earned in the year, this may take a few days,” says Gary Heynes from accountant Baker Tilly.
“Don’t leave it until the last minute, or you won’t be able to complete your return in time.”
Take care when entering information to complete your tax return online to avoid making errors.
“A simple transposition error could lead to a significant difference in tax liability for which you could face large penalties,” adds Heynes.
If you have had anything complex in the year, take professional advice.
Plan ahead
Once you’ve filed your return, write down all the key dates and deadlines for the year ahead in the diary, and set advance reminders to ensure future deadlines don’t come as a surprise.
