Withdrawal of penalty concession re late employer returns
An extra statutory concession (ESC) first introduced in 1995 is to be withdrawn. ESC B46 entitled‘Automatic penalties for late company and employers’ and contractors’ end-of-year returns‘ will cease to be relevant from 1 April 2011.
The ESC had allowed taxpayers to be relieved from penalties where company tax returns, and Pay As You Earn (PAYE) end-of-year returns (forms P35 and P14) were submitted late, provided they were submitted by the last working day within 7 days after the tax filing due dates.
This ESC was designed to ensure that penalties would not be charged where taxpayers had taken reasonable steps to file on time but had been unable to do so such as in the case of postal delays.
The ESC will no longer be applicable from 1 April 2011 as all the relevant filings covered in the ESC will be required to be made online. This is already the case for the PAYE returns and from 1 April 2011 (the date the ESC ceases to apply) will also be the case for company tax returns.
Taxpayers who submit late returns after this date and believe they have a reasonable excuse will still be able to request that a penalty be cancelled and have the right of appeal to the Tribunal.