13 April 2011 by

Avoid the new HMRC late filing and late payment penalties

With effect from 6 April 2011, HM Revenue & Customs has introduced significant new penalties for the late filing of tax returns and the late payment of tax due.

These penalties apply not only to individual self assessment tax returns but also to the filing of Inheritance Tax Accounts on death.

Unfortunately following the death of a loved one inheritance tax is the last thing you will want to think about, but as you can see from the new penalty framework set out below, it is now, more than ever, imperative that you address the issue of Inheritance tax as soon as possible to avoid paying any extra money to the taxman.

If Inheritance Tax is due on death, in most cases the deadline for paying is within six months of the end of the month in which the deceased died. The deadline for filing the Inheritance Tax Account is within 12 months of the end of the month in which the deceased died.

The new penalties are significantly increased for those who file and pay late and the greater the delay the greater the penalty will be. A six month late tax return could now attract a penalty of at least £1,300!

The penalties for filing your tax return late are:

Initial penalty: you will be charged an initial penalty of £100, even if you have no tax to pay or you have already paid all the tax you owe.

Three months late: you will be charged an automatic daily penalty of £10 per day, up to a maximum of £900.

Six months late: you will be charged further penalties, which are the greater of 5 per cent of tax due or £300.

Twelve months late: you will be charged yet more penalties, which are the greater of 5 per cent of tax due or £300. In serious cases you face a higher penalty of up to 100 per cent of the tax due.

The penalties for paying your tax late are:

Thirty days late: you will be charged an initial penalty of 5 per cent of the tax unpaid at that date.

Six months late: you will be charged a further penalty of 5 per cent of the tax that is still unpaid.

Twelve months late: you will be charged a further penalty of 5 per cent of the tax that is still unpaid.

It is worth considering that these penalties are on top of the interest that HMRC will charge on all outstanding amounts, including unpaid penalties, until payment is received.

5 April 2011 by

Polygamous Marriage and Intestacy

Bigamy, as we all know, is unlawful in the UK. However, polygamous marriage is legal in several other parts of the world and the UK will recognise any marriage that lawfully took place abroad. The issue of polygamous marriage can therefore on occasion affect the operation of UK law.

8 April 2011 by

Trusts for the Disabled, looking after vulnerable family members

Many people see trusts as a tax-saving device for the rich and irrelevant to the majority of people in the UK. In reality, trusts are much more commonplace. In its most basic form, a trust is simply an arrangement where one person (the trustee) looks after money or property on behalf of another (the beneficiary).

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