Late tax returns costing payers £1,200

HM Revenue and Customs (HMRC) said the additional penalty letters are being issued to people who have not sent in their 2010/11 tax returns.

Changes were introduced in April last year to boost incentives to file them and cut the cost of chasing up missing forms, meaning anyone who ignores their self-assessment filing obligations will be liable to higher penalties than in previous years.

The number of outstanding returns has almost halved in 2012, down to 5.9 per cent, compared with 10.7 per cent in 2011, HMRC said.

This means 518,000 fewer penalties are being issued. HMRC has also taken 273,000 people out of self-assessment this year.

The penalties being issued include a maximum £900 penalty for non-filing alongside a further late-filing penalty of £300 or five per cent of the tax due, whichever is higher.

HMRC’s director general for personal tax Stephen Banyard said: “We want the returns, not the penalties. This year, half a million more people have filed their return – which means we are issuing 44 per cent fewer penalties.

“But, despite several reminders, nearly six per cent of people have not sent their 2010/11 tax returns to us and they’ll be getting a penalty.

“Where someone has a reasonable excuse for not sending a return on time, we will waive the penalty.

“We also recognise that there will be some people within this group who don’t need to be in self-assessment, and we will be happy to remove them from the self-assessment system and cancel their penalty.”

The extra charges over the next few weeks are in addition to £100 late filing penalties for missing the January 31 filing deadline, which were sent out in late February and early March.

People can appeal against the charge if they believe they have a reasonable excuse for not sending their tax return, such as a family illness or bereavement.