January reminders: new HMRC penalties and new HMRC bank account

As January is fast approaching and we are nearing the time when tax returns need to be submitted and tax bills paid, it is appropriate to issue a reminder about two practical issues which will apply this year, namely the new penalty regime for late tax returns and HMRC changing their bank account.

With effect from 9 August 2011 HMRC’s bank accounts changed. Any payments directed to the Bank of England account will be automatically rejected and returned to your bank account. If this means that there is a delay and your payment misses the due date this could result in penalties and interest. 

Late self assessment tax returns (whether online or paper) will incur a £100 penalty if submitted after 31 January 2012 even if there is no tax due or the tax is paid on time. Once the return is 3 months late a further penalty of £10 per day is incurred up to a maximum of £900. As soon as the return is 6 months late a further penalty of £300 or 5% of the tax due arises, whichever is the higher.  The 6 month penalty is applied again if the return is 12 months late (i.e. £300 or 5% of tax due). 

Please make sure you are not caught out by this! If you would like more detailed information on this subject please give one of us a call on 01733 371180 and we will be happy to help.