Where the 2017/18 SA tax return has not been received by HMRC by 31 January 2019, a £100 late filing penalty is issued, normally in February 2019. This process should be automatic; the HMRC computer should issue the penalty based solely on date of receipt of the return, with no human interaction.
These penalty notices provide a good mechanism to alert both taxpayers and agents to any problems in the delivery of the return. For example, if the return was delivered, but for some reason it was not logged as received by HMRC, the penalty can be appealed and cancelled.
A penalty may also be issued where a paper tax return was submitted because the taxpayer’s circumstances fell within one of the online filing exclusions. In such cases the taxpayer has a reasonable excuse for filing on paper and the penalty should be cancelled by HMRC.
This year HMRC has deliberately stalled the process of issuing penalty notices and will instead release them in March and April, with the last issue date for a £100 late filing penalty being 30 April 2019. This is really too late, as where there has been a problem with the delivery of the return, daily £10 penalties will start to apply from 1 May 2019.
The late filing penalties will be due, but you may not be aware that it has been imposed, unless you check your online personal tax account. We can’t do this on behalf of our clients.
HMRC says the reason for delaying the penalty notices is to free up staff to deal with increased demand expected in their call centres regarding issues around the UK leaving the EU. The issue of penalty notices in February creates considerable pressure on the call centres as taxpayers ring to query the penalty.