Interest, penalties and surcharge: penalties: late filing fixed penalty for 2010-11 returns onwards
You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.
The due date for a return is usually
- 31 October for paper returns
- 31 January for online returns and for those customers who are unable to file online for technical or operational reasons
If the return is not filed by the due date the system will automatically impose a late filing fixed penalty. Most late return fixed penalties will be imposed in February. However, if a paper return is filed late, then the penalty will be imposed shortly after the return has been logged, rather than waiting until February.
The penalty charge will be £100 and, in the case of a partnership return, £100 will be charged to each partner. The penalty charge will be a fixed amount and will not be reduced (capped) because the tax liability is less than the penalty, or there is no tax liability or refund is due.
From April 2012, the system will automatically apply the late filing fixed penalty for late 2010-11 returns weekly. Over time the system will be able to automatically apply late filing fixed penalties for a maximum of four ‘in-date’ tax return years. For example, in 2014-15, the system can still automatically apply a late filing penalty for a late 2010-11 tax return. Note: A paper return received on 1 November, and a return filed online after midnight on 31 January, is late and a late filing fixed penalty will be charged, no concession is allowed. More information about filing paper returns and the 31 October deadline can be found at SAM120500 onwards.
The system will not automatically apply a late filing fixed penalty if the customer is subject to
- An Individual Voluntary Arrangement
If the return is outstanding but the address on the record is RLS, the system will not issue a late filing penalty. However, once the RLS status is clear, the penalty will be issued the next time the penalty run takes place. The only exception to this is if an up-to-date address is found but the penalty relates to a year prior to the four ‘in-date’ tax return years. The system will be unable to issue the penalty and this will need to be issued clerically. For further information see subject ‘Penalties: clerically raising penalties for years prior to CY-4 at SAM61280, and the Action Guide at SAM61281.
Issue of penalty notice
Where a late filing fixed penalty is imposed, a notice form SA326D (late tax return notice of penalty assessment) which includes a payslip, will be issued to the customer and a copy will be sent to the customer’s agent where the 64-8 signal is set. Enclosed with the notice of penalty assessment will be leaflet SA370 Notes, however this will not be sent with the agents copy.
In partnership cases, form SA328D - late partnership return notice of penalty assessment, which includes a payslip, will be issued to each partner and a copy will be sent to the partner’s agent where the 64-8 signal is set. Enclosed with the notice of penalty assessment will be leaflet SA371 Notes, however this will not be sent with the agents copy.
An appeal can be made within 30 days from the date of issue of the notice of penalty assessment. For penalties issued after 6 April 2012, an extra 7 days over and above the 30 days described in the legislation are allowed for printing and dispatch. However, for late filing fixed penalties for 2010-2011 issued prior to April 2012, that period will be 5 days not 7 days.
In partnership cases, all partners will be charged a £100 late filing fixed penalty if the partnership return is not received by the filing date. If an individual is a member of a partnership in a particular year but they were not identified as such until after the late filing fixed penalty has been charged on the partnership, then you must apply the penalty clerically. This will need to be done by creating a miscellaneous penalty charge using function CREATE SUNDRY CHARGE on the partner’s record. For more information, see subject ‘Manually raising a penalty’ (SAM61281).
You must also consider whether you need to manually raise late filing daily penalties (see SAM61230) or late filing (tax geared) penalties (see SAM61240) dependent on when the partner is linked to the partnership and how late the partnership return is. If more than one penalty is chargeable then separate charges must be created. Note: You may also need to consider manually issuing daily penalty reminders if daily penalties are accruing and a notice of penalty assessment has not been issued.
Interest will be charged if the penalty is not paid 30 days after the issue of the notice of penalty assessment.