Four reasons for filing your tax return on time

Late filing of your 2010-11 self assessment tax return will be subject to a new penalty regime.  The old £100 penalty was not the deterrent it was intended to be as too many tax payers are still filing late returns.

From October 2011, the last date for filing a paper return for 2010-11, four penalties will now apply:

1. From day one: £100 penalty applies even if you have no tax to pay or have paid any tax due.
2. Three months late: Automatic daily penalty of £10 per day up to a £900 maximum charge.
3. Six moths late: Additional penalties will be charged which are the greater of 5% of tax due or £300.
4. Over twelve months late: Further penalties based on the greater of 5% of tax due or £300.  In serious cases this penalty may be increased to up to 100% of the tax due.

These penalties will be applied after 31 January 2012.  As HMRC will assume that you are going to file online if you miss the 31 October 2011 paper filing deadline, you should under no circumstances post a paper return after 31 October 2011 as this will trigger the new penalties.

Contact BDM for further advice.