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Around half a million people are set to be fined for failing to submit their 2010/11 self assessment (SA) tax returns.
Penalties of at least £1,200 are being issued by HMRC, comprising the maximum £900 in daily penalties for non-filing, plus a further late-filing charge of £300 or 5% of the tax due, whichever is higher.
The number of outstanding returns has fallen to 5.9% of SA taxpayers for 2011/12, compared to 10.7% in 2010/11, according to the Revenue, meaning 518,000 fewer penalties are being levied.
The department has taken 273,000 people out of self assessment this year. Those who believe they do not need to be in SA, have received a late-filing fine for not submitting a return, can apply to be taken out of the system. The penalty will be cancelled if the taxman agrees to the change.
HMRC may have issued half a million taxpayers with penalties, but how many of them are actually correct?
We have one client who filed a 2011 paper return late on 1 February 2012. HMRC confirmed a few days later this had been recieved, and have since on 3 or 4 more occasions confirmed verbally or in writing the return was recieved, and yet they have still not prcessed it.
Hence a £1,200 penalty has been issued - and now we have to go through the process of appealing against this and then seeking reimbursement for costs in doing so just because HMRC cannot process things in good time!