Penalties, Fines, Interest
What happens when you get it wrong. There are penalties for not filing Accounts, Tax Returns, VAT Returns, PAYE Returns. There are further penalties for not paying the Tax when due. Most penalties get progressively higher the later the returns are. The information below gives you an idea of some of the penalties This list is not exhaustive and you should check with HMRC and Companies House for the latest position and individual circumstances.
Companies HouseHow late are the accounts delivered Penalty – Private Company ( the rates for a PLC are higher and not covered here )
In addition where there was a failure to comply with filing requirements in relation to the previous financial year (and that the previous financial year had begun on or after 6th April 2008), the penalty will be double that shown in the table. Last updated 6.3.2013 for more information see Companies House Penalties HMRC - CIS Returns
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HMRC - Corporation TaxLate Filing of Corporation Tax Return Automatic flat-rate penalties for late Company Tax ReturnsIf you file your Company Tax Return late, your company or organisation will be charged a flat-rate penalty of £100. HMRC will charge a further £100 penalty if you file your return more than three months late. If your Company Tax Return is late for three or more accounting periods in a row, the initial flat-rate penalty increases to £500 with a further £500 charged if you file your return more than three months late. Additional penalties for very late Company Tax ReturnsIf you don't file your Company Tax Return by the later of:
These penalties will be on top of the flat-rate penalty or penalties you've already been charged. These additional penalties are known as tax-related penalties because they are related to the amount of Corporation Tax your company or organisation owes. They are calculated as follows:
Last updated 6.3.2013 For more information see HMRC Late CT Penalties Late payment Interest for all main taxes Late payment 3% Last updated 6.3.2013 For more information see HMRC Interest Rates HMRC - Self AssessmentLate filing of Self Assessment Tax Return Penalties for missing the tax return deadlineLength of delay Penalty you will have to pay 1 day late A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe. 3 months late £10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above. 6 months late £300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above. 12 months late£300 or 5% of the tax due, whichever is the higher. In serious cases you may be asked to pay up to 100% of the tax due instead. These are as well as the penalties above. Late payment of Tax Penalties for paying lateLength of delay Penalty you will have to pay Thirty days late 5% of the tax you owe at that date Six months late 5% of the tax you owe at that date. This is as well as the 5% above. Twelve months late 5% of the tax unpaid at that date. This as well as the two 5% penalties above Last updated 6.3.2013 for more information see HMRC SA Penalties Late payment Interest for all main taxes Late payment 3% Last updated 6.3.2013 For more information see HMRC Interest Rates |
HMRC - PAYEPenalty charges for late monthly and quarterly PAYE payments Note: The first failure to pay on time does not count as a default. No. of defaults in a tax year Penalty percentage Amount to which penalty percentages apply 1-3 1% Total amount that is late in the tax year (ignoring the first late payment in that tax year) 4-6 2% 7-9 3% 10 or more 4% Additional penalties for monthly and quarterly payments over six months late If you have still not paid a monthly or quarterly amount in full, after six months you may have to pay a penalty of 5 per cent. A further penalty of 5 per cent may be charged if you have not paid after 12 months. These penalties may be charged in addition to the penalties for monthly and quarterly payments described in the previous section and apply even where only one payment in the tax year is late. End of year adjustmentsYou may be charged a late payment penalty if you pay less than is actually due. This applies even where you pay roughly the right amount each month or quarter and then make an end-of-year adjustment. You should therefore make sure you pay on time and in full each month or quarter, rather than estimate the amounts you need to pay. However if you pay an adjustment after the end of the year under a special arrangement such as applying the Intermediaries' rules (these are often referred to as IR35) or a formal modified PAYE arrangement known as Employment Procedures Appendix 6, HMRC will not charge late payment penalties, providing the terms of the arrangement are kept. To avoid receiving a penalty you must make certain that you pay the right amount on time each month or quarter. Amounts due annually or occasionallyYou may have to pay a penalty of 5 per cent of the amount that is late if you have not paid the full amount by the date known as the 'penalty date'. There's more information about the different 'penalty dates' later in the section. You may have to pay an additional 5 per cent penalty if you have still not paid the full amount within 6 months of the due date and a further 5 per cent penalty if you have still not paid the full amount within 12 months of the due date. Last updated 6.3.2013 for more information see HMRC Late PAYE Penalties Late payment Interest for all main taxes Late payment 3% Last updated 6.3.2013 For more information see HMRC Interest Rates HMRC - RTIHMRC - VAT |