There was once a time long long ago in a land far far away, or that’s how it feels, when we didn’t live in our draconian world of penalties. Now there are lots and it makes it even more important when you’re in business to be sure you know all the deadlines avoid the fines.
The most obvious is the £100 if you are late filing your self assessment return but did you know there are much worse penalties if you continue to leave it. On top of the £100 there will be £10 for each extra day you are late up to a maximum of £900. After 6 months if your tax return is still outstanding there is a further penalty of £300 or 5% of the tax due, whichever is greater.
There’s also a sting in the tail if you happen to be in a partnership. If the partnership return is filed late there is a fine for each partner and a bigger one for the partnership itself.
And there’s more…….
If you happen to make a mistake there are the following penalties:
- If you took reasonable care there’s no penalty, “reasonable” means you didn’t mean it although proving it may be a bit harder.
- Careless errors will cost up to 30% of the extra tax.
- If the error was deliberate it will be 20% to 70% of the extra tax.
- If you were deliberate and tried to conceal it the fine can be 100% of any additional tax.
There are now fines of £100 for any late submission of monthly or weekly payrolls. There are the same for CIS returns.
For VAT the situation is more complicated as the system is changing from the 1st April 2023 to one based on points. At the moment if you happen to miss one payment or be late submitting your VAT return you are “in default” for the first and there is no fine. But there are penalties if you do it again within the year and if you do it a second time within twelve months there charges on a sliding scale.
There is now a penalty if you are late submitting your annual P11D statement of benefits in kind .
Looking ahead new types of penalties are to be introduced with the moves to digital (MTD) and although HMRC have not yet announced them watch this space.
If you happen to be running a limited company there are more penalties from Companies House if you happen to miss a deadline but I’ll talk about these in another post.
In summary it looks like there are now penalties and deadlines for lots more than there used to be so anyone running a business now needs to be more aware.