Delay in tax return penalty letters may cause increased fines

If you are among the 746,000 taxpayers who missed the 31st January deadline for filing self-assessment tax returns, you may see increased fines because of a delay in sending out penalty notices.

HM Revenue and Customs (HMRC) usually sends out warning letters in February, but this year some may not be issued until as late as the end of April.

From 1st May the initial £100 fine rises by £10 a day, which means that penalties could already be accruing, when the letter arrives.

HMRC says the delay is due to an increased workload as a result of the UK leaving the European Union, but said no one would be “unfairly penalised”.

HMRC said: “We expect an increased demand in our call centres as the UK leaves the EU, so we intend to delay the issue of these notices to ensure we can provide the best service to our customers.

“This will release those staff for EU exit related work. We will issue daily penalties to individuals who have still not filed three months after the deadline, in appropriate cases, at the normal time.”

However, the Association of Taxation Technicians (ATT) fears if the penalty notices are not received until late April or into May, the £10 daily penalties will be unavoidable.

Jon Stride, of the ATT, said: “If the £100 penalty notice is issued by HMRC at the end of April, a taxpayer may, by the time the notice hits their doormat, already be incurring additional penalties."

Anyone who has yet to file their 2017-18 tax return should do so as a matter of urgency. They won’t be able to avoid the £100 penalty unless they have a reasonable excuse but getting the return filed online no later than 30th April will mean that they will avoid the additional £10 per day.”

Mr Stride is calling on HMRC to clarify whether it will factor in the late issuing of notices when considering a higher fine.

An HMRC spokesman said: “No-one will be unfairly penalised as a result of this change. The vast majority will be aware they missed the 31st January filing date, as we do remind regularly with nudge messages before the deadline.

"The latest date letters will go out is April and this will still leave customers several weeks to contact us.”

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Last updated: 25th February 2019