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VAT penalties for those who should be filing online and don’t

Posted by: edwinsmith on April 28th, 2011

From April 2011, HMRC have introduced a new penalty regime for businesses that were required to submit their VAT returns online from 1 April 2010 but have continued to submit paper returns.

These penalties will apply to returns for accounting periods ending on or after 31 March 2011.

Where a penalty is charged, the amount will be determined by the business’s annual VAT exclusive turnover, as follows:

Annual VAT exclusive turnover Penalty
£22,800,001 and above £400
£5,600,001 to £22,800,000 £300
£100,001 to £5,600,000 £200
£100,000 and under £100


The HMRC website has more information on the penalties for submitting a VAT return on paper instead of online.

If you haven't already, you can register for a HMRC online account for VAT  or any other service. Please note that you can have one HMRC account to deal with all matters of your business relating to HMRC.

For more information please read our previous news article about filing VAT returns online and paying VAT electronically.

Filed under: VAT

HMRC Real Time Information pilot

Posted by: edwinsmith on April 20th, 2011

HM Revenue & Customs (HMRC) has confirmed that Real Time Information (RTI) is going ahead. The system aims to improve the operation of Pay As You Earn (PAYE). Under RTI, employers will report tax and NICs deductions at the same time as they pay their employees, rather than at year end.

HMRC's aim of Real Time Information is to:

  • make it easier to ensure individuals pay the right tax after a change of job and remove the need for the P45/P46 process over time;
  • offer the prospect of simplifying the PAYE end of year reconciliation process for employers and HMRC;
  • remove much of the uncertainty that leads to errors in the Tax Credits system; and
  • support the introduction of the Universal Credit from October 2013.

Following the initial consultation, HMRC has confirmed:

  • A pilot will begin in April 2012 with volunteer employers and software developers;
  • Work to ensure data quality will begin from October 2011 and continue until all employers have moved to the new system successfully;
  • Subject to successful completion of the pilot, employers will be required to start using the RTI system from April 2013 and all employers will be using the RTI system by October 2013;
  • It will invite software providers and their clients to participate in the pilot.

If you are an employer who wants to take part in the pilot, you should contact your software provider.

Filed under: PAYE

New penalties for self assessment from 6 April 2011

Posted by: edwinsmith on April 20th, 2011

From 6 April 2011, HMRC have introduced new penalties for late filing of a tax return and late payment of tax for tax years 2010/11 onwards. This applies to personal, trust and partnership tax returns.

Under the new penalty regime, the penalty for late filing for personal and trust returns will no longer be capped at the lower of £100 and the balance of tax outstanding at 31 January.

The penalties for late filing will include:

  • £100 penalty immediately after the due date for filing (whether or not the tax has been paid)
  • daily penalties of £10 per day for returns that are more than 3 months late, running for a maximum of 90 days
  • penalties of 5% of the tax due for the return period (or £300 if greater) for prolonged failures (over 6 months and again at 12 months)


The penalty regime for late payment of any tax due will be:

  • a penalty of 5% of the amount of tax unpaid, generally 1 month after the payment due date (or at the filing date of the relevant return)
  • further penalties of 5% of any amounts still unpaid at 6 months and 12 months


You will also have to pay interest on all outstanding amounts, including any unpaid penalties, until payment is received.

Filed under: Tax

State pension age for women changing

Posted by: edwinsmith on April 4th, 2011

The age at which women are eligible to claim their state pension is changing, effective from April 2010.

The previous retirement age for women was 60, but this is increasing gradually to age 65 between April 2010 and November 2018 to be inline with the existing retirement age for men.  The changes will affect women born after 6 April 1950 and the date at which you will be eligible to claim your state pension is dependent on your birthday.  You can find out your individual state retirement age online.

The latest announcements also indicate that the government plans to increase the retirement age further for both men and women once the above scheme has been completed.  The increases are aimed to reflect changes in life expectancy.  Please look out for future articles on this website once the legislation has been agreed.

For further information and guidance regarding state pensions please contact us.

Filed under: PAYE, Tax