£100. If you missed the January 31, 2004 deadline for submitting your 2002/03 personal tax return you will receive a fixed £100 fine. If you still haven’t sent it in by July 31, 2004 another £100 fine will be added. "No tax, no fine?" Yes, if your tax return shows that there is little or no tax due, the automatic £100 fines can be reduced to the level of the tax liability, but you do have to ask the Taxman to over-ride his computer to make this happen.

Reasonable excuse. There is another way to get a penalty lifted and that’s to have what the Taxman calls a reasonable excuse. Death of a close relative shortly before the filing deadline, a very serious illness, hospitalization or circumstances beyond your control such as a fire, flood, (or a postal workers’ strike!) may all be considered a reasonable excuse. Nothing new here, however...

Daily penalty. During January the Taxman was threatening to issue late filing penalties of "up to" £60 a day for each outstanding tax return. The penalty mounts up for every day the tax return is late after the fine is imposed, (s.93(3) Taxes Management Act 1970). "No tax, no fine?" Unfortunately the fixed daily penalties cannot be reduced even if you have no tax to pay. "Got a reasonable excuse?" To avoid the daily penalty the reasonable excuse must have persisted for the entire time you are late with your return. Interaction between the two penalties? The Taxman has to impose the £100 fine before he can ask for a daily penalty.

Tip. Submit any outstanding tax returns by the end of February 2004! If you don’t, a 5% surcharge will be added to your tax bill as well as interest on overdue tax and the £100 fine. In respect of the £60 daily penalty threat, our sources tell us that the Taxman doesn’t intend to seek these until the end of February has passed.

Targeting. Yes, we do think that the Taxman is getting ready for a campaign of imposing daily penalties. However, this is likely to be for taxpayers that have more than one return outstanding. He won’t immediately be hitting everyone with these fines.