October 2006

Late Tax Returns and Key Dates for Taxpayers

It is now possible to buy life assurance with up to 40% tax relief.

It has been widely reported that late self assessment returns and forms that are incorrectly filled in are being targeted by HM Revenue & Customs. Taxpayers will be hit with higher late filing penalties and higher penalties for unpaid tax.

It is predicted that the late filing penalty will increase from £100 to possibly £250 and taxpayers who do not owe any tax will no longer be able to reclaim the fine.

It is also predicted that the Revenue will narrow the scope to reduce penalties (potentially 100% of the unpaid tax) and tighten up the rules on who should suffer fines.

The government is also expected to step up its crackdown on offshore assets as earlier this year they won a landmark ruling on offshore bank accounts.

Key Dates for Taxpayers:

• January 31 2007 – final deadline for completing a tax return for year ending 5 April 2006
• February 1 2007 – penalty of £100 for late submission of tax return
• February 28 2007 – 5% charge on any tax owed that is still outstanding
• July 31 2007 – a second penalty of £100 if tax return has still not been sent in

Please note this communication does not constitute individual or personalised advice.