The Taxman's Christmas Card

HM Revenue & Customs (HMRC) will be sending out a very different kind of Christmas greeting this festive season to hundreds of thousands of taxpayers to break the joyous news that they will be fined £1,300 or more.

The taxman is bringing the hammer down on the last remaining people who missed the deadline last January to file returns for the tax year that ended in April, 2011, and have still yet to comply fully.

Not owing any tax is no longer sufficient reason to not file a tax return and since the law was changed last year, you can be filed up to £1,600 for failing to file, even if no tax is due.

Richard Mannion, a director at accountants Smith & Williamson gave the Telegraph some advice for those on the receiving end of one of these letters. : “The first question to consider is whether you have a reasonable excuse for the delay. HM Revenue & Custom’s guidance gives examples such as documents being lost through theft, fire or flood, serious illness and bereavement. But bearing in mind that we are now a year down the track this will be a high hurdle to jump.”

Mike Warburton of accountants Grant Thornton said: “Sadly we are no longer able to get away with the tried and tested excuses that the dog swallowed the envelope, I had it in my back pocket and the wife put my trousers in the wash – or I was just about to send in the return when I was abducted by aliens.

Seamus Murphy of the online accountants taxback.com, said that in previous years the penalty regime for late filing was relatively benign because of the £100 limit and added: “This gave no incentive for taxpayers to file if they thought they had no further tax to pay. That’s one reason almost a million taxpayers file their returns late each year. The new penalty regime however is considerably more aggressive and penalties could very quickly run into the thousands with further penalties such as interest and surcharges on top.”

So it is more important than ever to stay abreast of your tax situation and meet the increasingly draconian conditions to avoid being fined

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