Experts have warned that taxpayers who missed January’s Self Assessment deadline may see increased fines because of a delay in issuing penalty notices.
The warning comes after HM Revenue & Customs issued a new report notifying taxpayers of a change to the timing for sending notification of Self Assessment penalties.
Automatic £100 penalty notices are normally issued in February for individuals who have not filed their online return by 31 January. However, the regulator says due to an expected “increased demand on our call centres” in anticipation of the UK leaving the EU, it would delay the issue of these notices.
According to the report, the latest date that the notices will go out is the end of April, meaning taxpayers may not be notified of their lateness until the second tier of penalties kicks in. The latest statistics estimate that around 746,000 taxpayers missed the deadline.
Under the penalty regime, late Self Assessment returns are automatically fined £100 in the three months after the deadline has passed. After three months, however, the fine rises by £10 a day.
Announcing the move to push back penalty notices, HMRC said: “Individuals who filed late will still be charged the penalty; but the notice will be delivered later than normal. We will issue daily penalties to individuals who have still not filed three months after the deadline, in appropriate cases, at the normal time.”
Critics, however, have called the decision “harsh and unfair”.
Commenting on the change, tax lawyer Dan Neidle said: “Where people have genuinely forgotten, it seems harsh and even unfair to remind them so late that they’re already running up daily penalties.”
Jon Stride, of the Association of Taxation Technicians, added: “If the £100 penalty notice is issued by HMRC at the end of April, a taxpayer may, by the time the notice hits their doormat, already be incurring additional penalties.”