Missed July deadline will leave taxpayers facing penalty fees
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Your support makes all the difference.The self assessment tax system covers around 9 million taxpayers, many of whom must make their second payment on account for the latest financial year by the end of the month.
However, Geraint Jones, a senior tax adviser at Blick Rothenberg, warned: "Consumer debt is at an all time high and we suspect many people have put off paying."
Jones said HM Customs & Revenue was unsympathetic towards taxpayers who missed self assessment deadlines. "Many taxpayers do not appear to realise there are fines and penalties," he added.
In addition to a £100 fine for anyone who misses the 31 January deadline for filing their tax return, interest is charged on outstanding tax at 7.5 per cent a year. A 5 per cent surcharge is then added each January to tax bills that remain unsettled for a year or more - a second charge is payable if the bill hasn't been paid by the end of July.
David Kilshaw, a tax partner at accountant KPMG, warned HM Customs & Revenue was set to get tough on taxpayers failing to meet deadlines. In particular, it is to target those who persistently fail to file tax returns.
"Individuals who failed to meet the deadline in January 2005 will already have a penalty of £100," he warned. "In July 2004 there were over 260,000 people in this position - after 31 July, a further £100 penalty clocks up and the taxman can charge £60 a day."
The latter measure is rarely used, but revenue from penalties has risen sharply in recent years. HM Customs & Revenue charged £13m in penalties between October 2003 and October 2004 alone.
However, Jeff Harrison, a tax executive at solicitors Barr Ellison, warned taxpayers to check their bills very carefully. A recent National Audit Office report found more than 500,000 tax returns were incorrectly processed in 2003-04 - as a result, one group of taxpayers was overcharged by £50m.
Harrison said: "Taxpayers expect their returns will be processed accurately, but this is clearly not the case."
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