Taxpayers who missed the 31st January self-assessment tax return deadline for the current tax year, will incur an immediate £100 late filing penalty.
This initial fine will be followed by a string of other penalties for failing to submit a tax return online three, six and 12 months after the 31st January cut-off.
In total, the financial penalties for a 12-month overdue tax return will be a minimum of £1,600, which can seriously affect the bottom line of any self-employed professional or sole trader.
HM Revenue & Customs (HMRC) also penalised 8,000 more UK taxpayers for unacceptable errors in the last tax year than it did a year earlier, according to data following a Freedom of Information request from RSM.
The figures indicate that 40% more taxpayers are being fined by HMRC for deliberately understating their revenue on their self-assessment tax return.
During the 2015-16 financial year, the tax authority issued 28,663 financial penalties to taxpayers for errors made on self-assessment forms, compared with just 20,740 throughout the 2014-15 financial year.
That figure was drastically lower still during the 2012-13 financial year, with just 5,162 taxpayers penalised, underlining HMRC’s increased focus and ruthlessness on tax evaders.
George Bull, tax expert, RSM, said: “It’s difficult to read the figures without drawing the conclusion that something has changed in HMRC’s approach to penalties.
“This spike in penalties suggests a marked change in attitude at HMRC, and it is clear that inspectors are now taking a much harder line.”
If you need guidance regarding your tax affairs, Ascentant can work with you to see if any tax savings can be made, calculate your tax liabilities and arrange payment to allow you to concentrate fully on running your business.