HM Revenue & Customs (HMRC) are warning all business owners and self-employed workers that if they did not send in their paper self-assessment tax returns by the 31st October deadline, they must now send them online or face increased penalties.
Unfortunately, the self-assessment tax return is an unavoidable burden if you are liable for self-employed tax or have complicated income tax affairs. Both self-employed business owners and company directors (which are often one and the same for freelancers) must complete self-assessment tax returns.
Businesses and self-employed traders that file their paper self-assessment tax form after the deadline will now face an automatic fixed £100 fine even if no tax is due, thanks to a new penalty system which has come into force.
However, if you thought you could rest on your laurels and pay the £100 fine, think again. Any outstanding tax returns will incur fines of £10 a day after three months and for delays of more than six months a further fine of £300 or 5% of the total tax owed will be issued, whichever is the greater.
Please take note: Online tax returns must reach HMRC by 31 January 2012.
An HMRC spokesperson commented: “These new penalties, which increase over time, will encourage people to submit returns as soon as possible.
“We are forced to spend a lot of time chasing up late returns and late payment, and the new system aims to reduce that.”
Click here to be taken to the HMRC website and file your self-assessment tax return online.
