Self Assessment Penalties

for late submission of your tax return

New, harsh penalties for submitting your self assessment tax return late come into force for the 2011 tax return, which in most cases is due to be submitted on or before 31 January 2012.

These rules also apply to partnership and trust tax returns.

The deadlines remain at 31 October for paper returns and 31 January for online returns, (we always submit online).

The most important point about the new rules is that the "capping" rule has gone. This means that you have to pay the penalty whatever your tax liability - even if it's nil.

The penalties are

An initial £100 penalty for being late
After 3 months, additional daily penalties of £10 per day, (up to a maximum of £900)
After 6 months, a further penalty of £300 or 5% of the tax due, (whichever is the greater)
After 12 months, another £300 or 5%, (whichever is the greater)

This means that after six months the penalty will be at least £1,300 even if your tax liablity is nil, and at least £1,600 after 12 months.