Self - assessment penalties delayed until April

HMRC warns that £100 self-assessment penalty notices (2017/18) automatically issued in February, will now be sent at the end of April.

HMRC would have already issued penalty notices to taxpayers who had not filed on time. However, anticipating increased demands on its staff as the Brexit deadline looms, it has announced that it would delay issuing penalty notices, so that it can release staff for EU exit related work.

Over 700,000 taxpayers missed the deadline (of 31^st January) to submit their tax returns online.

So from the 1^st May, the standard £100 fine will rise by £10 a day, and given that penalty notices can take over a week to arrive by post, taxpayers could easily be subject to daily penalties before they even realise their return is late!

HMRC has said it will treat those with genuine excuses leniently, as it focuses penalties on those who persistently fail to complete their tax returns, and deliberate tax evaders. However, the excuse must be genuine and they may ask for evidence.

What HMRC's news bulletin said:

• Taxpayers who filed late will still be charged, but the penalty notice will be delivered later than normal.
• The latest date that the notices will go out is the end of April, but issued sooner if an EU withdrawal agreement is agreed.
• Daily penalties to taxpayers who have still not filed three months after the 31 January deadline, with penalties being imposed from the normal deadline – that is, tax returns not received by 1 May 2019.

The Association of Taxation Technicians (ATT) echoed the point that fines could begin rising before some people had even received a letter telling them.

Jon Stride, (of the ATT), said: "If the £100 penalty notice is issued by HMRC at the end of April, a taxpayer may, by the time the notice hits their doormat, already be incurring additional penalties."

An HMRC spokesperson said: "No-one will be unfairly penalised as a result of this change. The vast majority will be aware they missed the January 31 filing date, as we do remind regularly with nudge messages before the deadline. The latest date letters will go out is April, and this will still leave customers several weeks to contact us."

If you think you may be impacted by these fines, please do give us a call on 0208 861 7575. We also have some tips and advice for the self-employed, which you can find here.