Tax and Companies House penalties
Companies House late filing penalties
Not more than 1 month late £150
More than 1 month but not more than 3 months £375
More than 3 months but not more than 6 months £750
More than 6 months £1,500
Companies House striking off and prosecutions
Almost as many companies as are registered are struck off the register in any year. This normally results from failure to file the annual return. Striking off is a big problem if you are trading because the bank will freeze your account and there is a legalistic procedure for restoring the company. Please contact us to avoid this happening. If it has already happened we can help with restoration services and new banking arrangements if necessary.
Corporation tax late filing penalties
Corporation Tax is payable nine months after the Corporation Tax return period end and interest is charged after that date. Penalties are charged for form CT600 Company Tax Return filed later than a year after the Corporation Tax return period end.
Penalties are:
Up to three months late £100
More than 3 months but not more than 6 months £200
More than 6 months but not more than 24 months £200 + 10% of Corp Tax
More than 24 months £200 + 20% of Corp Tax
Where the Corporation Tax return is late for a third consecutive year:
Up to three months late the figure of £100 is increased to £500
More than 3 months late the figure of £200 is increased to £1,000
Personal tax late filing penalties for the year ended 5th April 2010
After the next 31st January 2011 £100
After the following 31st July 2011 another £100
Tax paid later than 28th February 2011 5% of tax
After the following 31st July 2011 another 5% of tax
If you have still not filed 2008/09 for the year ended 5th April 2009
After the following 31st July 2010 another £100
Tax paid later than 28th February 2010 5% of tax
After the following 31st July 2010 another 5% of tax
Vat penalties for late returns:
Times late:
1. warning.
2. 2% of VAT payable
3. 5% " " "
4. 10% " " "
5. 15% " " "
Both the return and the payment must be on time. Late returns result in moving up the scale while on-time returns result in moving down.
PAYE/NI annual P35 returns
£100 per month late up to £1,200 maximum. Nil if there is no amount of PAYE or NI payable.
CIS Construction industry scheme monthly returns
£100 per month late for each of the monthly returns. This can quickly run out of hand and there is virtually no argument which will be accepted in mitigation.
Employer's PAYE and NI
Provisions are now in force to charge a penalty where PAYE and NI tax is paid late. Also CIS payments. The liability to a penalty is based on a totting up procedure depending on the number of defaults during a tax year. A penalty will not be levied for the first default and will then rise as follows:
Times penalty % of tax payable
late
Once nil
Twice 1%
Three times 1%
4 to 6 times 2%
7 to 9 times 3%
10 + times 4%
balances unpaid:
six months late +5%
twelve months late +a further 5%
The current aim of H M Revenue & Customs is to implement the PAYE late payment penalties with effect from 6 April 2010.
Tax adjustments and penalties arising from enquiries or investigations
The new structure for adjustments to tax figures (potential lost revenue) and penalties is applicable where filing is due on or after 1.4.2009 relating to a tax period starting on or after 1.4.2008.
This widely means Form SA100 Tax Return for the year ended 5 April 2009 onwards and company year ends 31 March 2009 onwards.
Where the taxpayer disagrees with the inspector about tax assessments or penalties an appeal may be made to the tribunal service.
Adjustments to tax figures will be netted off against any overpayment of tax found in the same period.
Overpayment by another person or company etc. will not be netted off against the adjustment. This will need to be subject of an error and mistake claim which may or may not be accepted by the tax office.
Minimum to Maximum penalty
Timing adjustment only: correct tax paid later than due 5% minimum to a maximum of 5% per year of delay
All others:
* Careless, unprompted disclosure 0% to 30%
* Careless, prompted disclosure 15% to 30%
Deliberate but not concealed, unprompted disclosure 20% to 70%
Deliberate but not concealed, prompted disclosure 35% to70%
Deliberate and concealed, unprompted disclosure 30% to100%
Deliberate and concealed, prompted disclosure 50% to100%
Prompted disclosure means after an investigation has started. Unprompted means that the person making the disclosure has no reason to believe that HMRC have discovered or are about to discover the inaccuracy.
Mitigation
* Careless, unprompted or prompted disclosure penalty
The whole penalty may be waived if the taxpayer complies with certain record keeping conditions over the following two years.
All penalties: mitigation between maximum and minimum:
Telling the inspector about the offence 30%
Giving the inspector reasonable help 40%
Allowing the inspector access to the relevant records 30%
Total mitigation from maximum to minimum 100%
There is no other mitigation below the minimum.
