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Rise in penalties for self-assessment late payments

By Tim Woodgates

Moore Stephens

THE number of people fined for paying their self-assessment tax bills late has risen by 14 per cent in the last year alone, to 331,000 for the 2016/17 tax year (latest full year available), up from 291,000 the year before, say accountants and business advisors, Moore Stephens.

The jump in the number of fines for late payment is due in part to the record number of people completing self-assessment returns, many of whom are not familiar with the tax payment dates. The number of self-employed individuals in the UK reached a record high of 4.93 million in March 2019 – up by 180,000 in just a year.

Taxpayers could also be struggling to meet their tax obligations on time as the economy struggles. Moore Stephens says that although many of these taxpayers fully intend paying their returns before the deadline, some are simply not able to pay the full amount on time.

Fines for those who pay late can be substantial. If the taxpayer is 30 days or more late in paying their tax returns, they are issued with a fine of five per cent of all the outstanding tax. At six months, they are issued with a further fine of five per cent of all the tax due at that date, and repeated again at 12 months.

Tim Woodgates, Associate at Moore Stephens, said: “The pool of people at risk of being fined for late payment is now bigger than ever as self-employment continues to grow.”

“UK taxpayers are feeling the pinch. As a result, some do not have the money to pay the tax bill on time, even though they want to.”

Moore Stephens adds that 233,000 late payment penalties have been raised for the 2017/18 tax year so far, for which the payment deadline was 31 January 2019. HMRC has said it will be issuing more penalties for that year in the near future.

Moore Stephens says that just 14 per cent of all the fines for late payment of self-assessment tax bills were cancelled last year, a fall from 16 per cent and 18 per cent cancelled in the previous two years. This could suggest that HMRC is becoming less sympathetic to taxpayers who appeal against late payment penalties – even though many have genuine and legitimate reasons for paying late.

Moore Stephens adds that HMRC appears to be narrowing the grounds for what it considers to be a ‘reasonable excuse’ for late payment, such as illness, bereavement or not receiving reminder letters from HMRC.

If you need help with a tax return, contact Moore Stephens on 01536 461900 or email

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