HMRC has today published the fact that they are about to issue late return penalties to 850,000 people over the next fortnight.
This is down from 1.4 million last year, so you may think this is good news.
However… last year it was possible to have a fine cancelled where there was no tax due, unfortunately with the change in tax penalties this year that is no longer the case.
Now, penalties are due even if there is no tax due – and if people delay in submitting the form further they could be in line to pay £1600 of fines even if there is no tax due.
All it would take would be 625,000 out of the 850,000 people who are late with their tax return to delay things longer and incur the full £1600 penalty… and we could have HMRC making a billion pounds!
HMRC have repeatedly said that they intend to use their new penalty powers for the £1600 fines… so I’m sure we will be seeing some reports where people have been caught out.
I first posted a blog about the new fines in March 2011, so they have been known about for some time.