According to research from Bloomsbury Professional, 915,000 late filing penalties were issued for late 2011-12 tax returns, down from the 1.16 million penalties issued for late 2010-11 returns, a drop of 245,000.
The Revenue introduced more punitive measures for late returns which came into effect for the tax year ending March 2012. Under the new system returns filed one day late will incur a fee of £100 even if there is no tax due, in addition to daily penalties of £10 for each subsequent day that the return is overdue.
Previously, a £100 fine would be incurred for a late return but would be reduced to nil if no tax was payable, with an additional £100 to be paid for returns more than 6 months late.
Martin Casimir, managing director at Bloomsbury, says the new system is part of HMRC’s attempts to meet “ambitious” government revenue targets.
“Judging by the big drop in penalties issued, it appears that this new system is working well in reducing the number of taxpayers who fail to file their returns on time,” he said.
“In the past HMRC had been fairly lenient towards late filers, with offenders being fined no more than £200 for their late return, but the price to pay for late filing is now bigger than ever, and taxpayers are aware of this."
Casimir added that while the number of late filing payment penalties issued has dropped, this does not necessarily mean HMRC’s revenue from fining taxpayers has also fallen.
“Despite fewer fines being issued, the value of these fines is likely to be significantly higher than was the case under the old penalty system.”