Is a tax return penalty notice coming your way?

Date: 15th February 2012

Taxpayers who missed the recent self-assessment tax return deadline can expect to be notified of a penalty over the coming days.

HM Revenue & Customs (HMRC) has revealed to the Institute of Chartered Accountants in England and Wales (ICAEW) that it will begin sending out penalty notices from February 17th.

The notices will advise taxpayers who missed the deadline that they now have to pay an automatic £100 penalty - an amount that could rise to £1,600 under HMRC's new fining system.

However, the ICEAW also revealed that in an unexpected move, HMRC is offering to remove penalties and cancel tax returns for taxpayers who do not need to be in the self-assessment (SA) system.

Taxpayers are being asked to call the SA helpline where HMRC staff will ask them a few questions to decide if they can be removed from the system or not.

"We have been warning readers for some time about the new penalty rule introduced this year which means that if you missed the deadline you will have to pay a £100 late filing penalty even if you had no income to report or no tax to pay," the ICAEW commented.