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Penalties for late returns and late payment of tax

Income tax self assessment Note 2010/11 2009/10
Standard penalty - up to 6 months late 1,4 £100 £100
Standard penalty - up to 12 months late 1 £200 £200
Return over 12 months late   100% of tax due 100% of tax due
Daily penalty - at HMRC officer's discretion   £60 £60

Corporation tax self assessment
First and second late returns - up to 3 months late   £100 £100
Third consecutive late return - up to 3 months late   £500 £500
First and second late returns - 3 - 6 months late   £200 £200
Third consecutive late return - 3 - 6 months late   £1,000 £1,000
Returns more than 6 months late   10% of tax outstanding 10% of tax outstanding
Returns more than 12 months late   20% of tax outstanding 20% of tax outstanding

PAYE
Year end return (form P35) and related forms   £100 per 50 employees per month (or part) £100 per 50 employees per month (or part)
Form P11D(b) where due   £100 per 50 employees per month (or part) £100 per 50 employees per month (or part)
Forms P11D   £300 per form £300 per form

CIS
Monthly return - CIS 300   £100 per 50 subcontractors per month £100 per 50 subcontractors per month

VAT : default surcharge periods
First return in surcharge period 3 2% 2%
Second return in surcharge period 3 5% 5%
Third return in surcharge period   10% 10%
Fourth and subsequent return in surcharge period   15% 15%

Notes

  1. The fixed penalties for late self assessment returns cannot exceed the tax outstanding on the due date for the return. If all of the tax has been paid the fixed penalty is zero. This does not apply to partnership and trust returns and this 'cap' is due to be withdrawn shortly.
  2. VAT default surcharge also applies when the VAT return has been submitted but the VAT remains unpaid. The penalty is calculated at the rate shown applied to the VAT outstanding. Late repayment returns still register as a default, but no penalty is due.
  3. Penalties at 2% and 5% are not levied if the amount of the penalty does not exceed £400, but the default still registers and increases the potential penalty for the next default.
  4. Taxpayers who file late paper return, but pay all of their tax outstanding before 31 January 2011 will have their penalty "capped" at zero.
    So a late paper return will not, accrue a penalty provided that the tax is paid by the due date. This does not apply to partnership returns.

Late payment penalties

Self Assessment

Penalties of 5% of the tax unpaid are charged one month and six months after the due date for tax payment (31 Jan) on 28 February & 31 July.

VAT

The default surcharge penalty system also applies to late payment of VAT liabilities, even if the return is filed on time.

PAYE, NIC and CIS tax

A new penalty regime commenced in 2010/11 under which late payment of PAYE, NIC and related liabilities during the tax year will attract a penalty. The first late payment in the tax year is not liable to penalties but subsequent late payments attract a penalty base on the total number of late payments in the tax year.

Number of defaults Penalty %
1 0
2,3,4 1%
5,6,7 2%
8,9,10 3%
11 or more 4%

Tax is due by 19th of the following month or 22nd if paid electronically. Small employers can register for the quarterly payment scheme.

Limited company accounts – late filing penalties

Penalties for late filing are as follows:

Length of delay, based on the filing date Private company Public company
Not more than one month £150 £750
More than one month but not more than three months £375 £1,500
More than three months but not more than six months £750 £3,000
More than six months £1,500 £7,500

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