Fines set to increase for late filing of tax returns.

Fines set to increase for late filing of tax returns.

Part of the responsibility of business owners, and self-employed individuals, is to file a tax return by the deadline set by HMRC.  Made clear in all forms, and through the media, should your tax return be filed late, a fine will be incurred, which increases as the time passes.  Under new plans, there will be an even greater incentive to file on time as late payment fines for small business owners could triple if HMRC’s proposal goes ahead.

When Tax Returns Get Taxing

The new scheme would use a sliding scale fine system, which would see the most overdue payments incur a fine of 15% instead of the current 5%

Under the present system, businesses that fail to meet the annual tax deadline are fined £100. If the bill is not paid within 30 days a further fine of 5% of tax dues is added, then after six months an additional 5%, then after twelve months a further 5%.

Under the new scheme the penalty up to thirty days would be only 4%, but rise to 10% after six months and 15% after a year.

In a statement, HMRC said: “Our aim is for fewer people to pay a penalty at all. The proposed new system will be simpler, fairer and more proportionate.” However, opponents of the scheme have argued that it is nothing more than a revenue raising exercise.

Further changes in the way tax is paid have also been proposed as part of the HMRC’s scheme, ‘Making Tax Digital.’ Under this scheme, businesses would be required to file their tax returns online and they would be due quarterly rather than yearly. This proposal has also met with criticism by opponents who say it will unnecessarily increase administration costs.

HMRC said: “We are working closely with businesses and other taxpayers to refine these proposals, and have today launched a three month consultation period for people to tell us their views.”

If you are interested in sharing your views, you can email your opinions to MTDTA@hmrc.gsi.gov.uk. until the consultation closes in November.

In the meantime, make sure you are organised ahead of the tax returns deadline. Why worry about organising your accounts yourself? Newton Magnus are reputable, approachable and affordable accountants in Dorset, Poole, Broadstone and the surrounding areas. Specialists in taxes and helping manage your tax return, call us today for a no obligation quote.