SMALL business owners across Peterborough are being warned to keep on top of tax returns, or risk significant penalties under tough new HMRC rules. From 31st October, new rules will see late payers face hefty cumulative fines, but local tax specialist, Wahid Rehman is advising local businesses to act early to avoid the wrath of the tax inspector.
Previously, missing the deadline led to a £100 penalty and this was ‘capped’ to a maximum of the tax bill, i.e. if a tax refund was due, the penalty was mitigated. But under these new rules, the £100 penalty is automatic and a further £10 will be charged daily if the return is more than three months late, up to a maximum of £900. An additional penalty will be given for returns more than six months late, calculated as the higher of £300 or 5% of the tax due and this fine will be repeated again in a further six months time if the returns have not been filed.
Wahid Rehman, who runs TaxAssist Accountants in Peterborough, said, “These latest fines come on the back of a series of tough new campaigns from the HMRC. Bookkeeping can be time consuming and given the fact that late filing of tax returns only previously carried a fine of £100, perhaps was not seen as a priority.
“Following the announcement of new stiff penalties, we’re advising small businesses to keep on top of their books and file on time- by 31st October by paper, or online by 31st January 2012. Snowballing costs can be deadly for a small business where balancing the books can make the difference between paying your staff and going out of business.”
TaxAssist Accountants Peterborough is a local business, based in Peterborough providing tax and accountancy advice and services purely to small businesses.