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With the 31 October deadline for paper tax returns just days away, HM Revenue & Customs (HMRC) is urging anyone who hasn’t yet filed their paper return to act now, to avoid a new late filing penalty.

If you send in a paper tax return on or after 1 November, you will now incur a £100 penalty – even if there is no tax to pay or the tax due is paid on time – following the introduction of a new penalty regime this year. The longer you delay, the more you'll have to pay, as there are further late-filing penalties after three, six and twelve months.

The new penalties for late Self Assessment returns are:

• The initial £100 fixed penalty, which will now apply even if there is no tax to pay, or if the tax due is paid on time;
• After 3 months, additional daily penalties of £10 per day, up to a maximum of £900;
• After 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
• After 12 months, another 5% or £300 charge, whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due.

There are also additional new penalties for paying tax late of 5% of the tax unpaid at: 30 days; 6 months; and 12 months.

If you can’t send your paper return by 31 October, you can still avoid a penalty by sending your tax return online instead. However, if you do send a paper return after the 31 October deadline, you cannot avoid the initial £100 penalty by subsequently filing online.

[ Many agents will be familiar with the tax case Steeden v Carver (Sp C 212) which traditionally secured a few days' grace; HMRC says this will NOT apply for 2010/11 returns but any paper return received in a tax office post box before 07:30 on the morning of 1 November 2011 will be treated as having been received on time - for more information see HMRC's Self Assessment Guidance Manual SAM121030 - Returns: Individual Returns: Logging Individuals' Returns - Ed ]

To find out more about the October deadline and sending a paper tax return, go to Sending  Your Self Assessment Tax Return

If you send your tax return online, you get an extra three months to send it, as the deadline is 31 January. There are lots of other advantages too:

• your tax is calculated automatically;
• you get an immediate online acknowledgement; and
• your tax return is processed faster, so any money that you are owed is repaid more quickly.

Registering for HMRC Online Services is simple – just go to Online Services

For help and advice on completing a return, visit Self Assessment or call the Self Assessment helpline on 0845 9000 444.

Further information on the new penalties is available from the HMRC website at Tax Return Deadlines and Penalties