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Hefty penalties apply to people who fail to file their Tax Return on time and you could pay as much as £1,300 in penalties if you file your Tax Return six months late.

The longer the delay in filing the Return, the higher the penalty that is charged. Paper Returns for 2014/15 must be filed by 31 October 2015 and online Returns must be filed by 31 January 2016.

Where a Return is filed after these dates, a penalty is charged.

The penalty is £100 if the Return is filed one day late, even if you do not owe any tax. If the Return is filed up to three months late, a further penalty of £10 per day is charged to a maximum of £900. If the Return is filed six months late a further penalty of £300 or 5% of the tax due, if higher, is charged.

A further penalty of £300 or 5% of the tax due, if higher, is charged if the Return is still outstanding after 12 months.

Although HMRC’s stance on automatic penalties appears to be softening, it is better to file on time to be on the safe side.

Example:
John files his 2013/14 self-assessment Return online in August 2015. The Return was due by 31 January 2015. The tax due was £1,000. The Return was filed more than six months late and John is charged a penalty of £1,300. This could easily have been avoided had John been more organised and filed his Return by the deadline of 31 January 2015.

The penalties apply in addition to interest and surcharges on late-paid tax.