HMRC issues 500,000 £1,200 penalty notices
Get any interesting post this morning? Perhaps you have one of those cards that says the postman couldn’t be bothered to knock on your door or try and push your parcel through the letterbox? Maybe you got an energy bill for hundreds of pounds to add to the energy company’s stinking big profits? Or perhaps you got a penalty notice from HMRC for £1,200.
The bad news is that, if you failed to send in your 2010/11 tax return, due by 31 January 2012, this sum is entirely correct, being £300 late filing fixed penalties (£100 fine every three months from and including 31 January onwards) added to £900 in 90 days of £10 a day fines since the start of May. Just don’t say we didn’t warn you.
HMRC suggest that 500,000 people will be getting these penalties which equates to approximately 6% of issued returns. That’s a nice little £600 million earner for HMRC following this year’s rule change on penalties. Previously you could get the penalty reduced if you owed no tax; this is no longer the case and if you should have completed a return, even if you have paid all you owe, you are still liable for the £1,200.
However, another change this year is that HMRC are willing to remove people from their system if they genuinely had no reason to complete a return, which would be a very good reason why no return was completed. An HMRC spokesperson confirmed that "We recognise that there will be some people within this group who do not need to be in self-assessment, and we will be happy to remove them from the system and cancel their penalty."
If you think this may be you, rather than hoping the penalty will go away by itself (it won’t) you should call 0845 900 0444 and tell HMRC so they can stop those nasty brown envelopes landing on your doormat. Well, some of them anyway.
This handy infographic from HMRC explains in simple terms whether you can be removed from the system and escape the penalty.
If you end up with “you must complete and send a tax return”, it’s too late. You are in for £1,200. How hard is it to complete a tax return in 9 months. Or even 13 months (at which point the penalty would have been a mere £200). You only have yourself to blame.