UK Taxpayers Continue To File Late, Face Unecessary Fines

by Amanda Banks, Tax-News.com, London

23 January 2008

Taxpayers are set to gift the taxman an unnecessary GBP463 million this year in fines generated by late returns, miscalculations and surcharges on unpaid tax, according to a recent survey conducted by Unbiased.co.uk, theconsumer brand of IFA Promotion, an organisation established in 1989 to promote the value and accessibility of independent financial advice to the public.

The research revealed, however, that this amount has dropped by GBP26 million on estimations for last year.

Failure to get forms to HM Revenue & Customs (HMRC) by the fast-approaching January 31st deadline will incur an initial GBP100 late payment charge, as well as a hefty additional GBP60 a day fine.

If the return is still overdue in July, a supplementary penalty of GBP100 will be added additional to the daily charges. Furthermore, a penalty of up to GBP3,000 may be charged for each year in which inadequate records are kept.

David Elms, Chief Executive of Unbiased.co.uk, observed that:

“The rules on self-assessment forms remain unforgiving towards those who return their forms late or incorrectly, so now is the time to take action!"

He added that: "Missing the HMRC’s deadlines inevitably results in monetary penalties, so we would urge consumers to avoid these fines by ensuring that their forms arrive on time and in order. Remember that expert help is always at hand, in the shape of an IFA, to help you deal with your tax return.”

The survey suggested that UK taxpayers will take the hit of fines and charges in the following ways:

- GBP89 million in fines for forms returned past the January 31st deadline;

- GBP302 million through fines for mis-calculations made on tax forms; and

- GBP72 million in surcharges for unpaid tax from previous years.

In 2006, it was estimated that 876,000 self-assessment forms were received after the January 31st deadline. Of these, the vast majority incurred a penalty of GBP100, and many more were subject to further surcharges.

This represented a drop of 12% on 2005, however.

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