New penalty regime

HMRC can now charge £100 penalty for submitting a late return, even if all tax is paid on time.  Normally a return can be submitted on paper up to 31 October, but will incur the £100 fine if it reaches HMRC after 1 November.  Returns submitted electronically are due by 31 January.  These deadlines may be extended if HMRC issues the return after 31 July following the end of the tax year for which the return is required.

If the return is still outstanding after 3 months the fine can increase by £10 per day with a further fine after 6 months of at least £300 or 5% of the tax shown on the return, if greater.  A further charge of at least £300 or 5% of the tax will be charged if the return is still outstanding after 12 months.  This could increase to 100% of the tax if the failure to submit the return is deliberate and the tax liability has been concealed.