Tougher tax regime will leave late payers with fines of up to £1,600

With a little over two weeks to go before the self-assessment tax return deadline, taxpayers are being warned that they need to get their skates on or fall foul of a newly strengthened penalty regime.

As well as the standard £100 fine for filing a tax return after the 31 January deadline, people who leave it a further three months will have to pay £10 a day in fines up to a maximum of £900. A further £300 can be levied after six months and another £300 after 12 months, adding up to a potential £1,600 in fines.

"The changes made to late filing and payment penalties indicate that HMRC is increasingly taking taxpayers' behaviour into account when calculating penalties. For example, penalties for failing to submit a return on time now apply regardless of whether the tax has been paid, unlike in previous years when it was possible to avoid a penalty by paying tax due as in prior years," said Fiona Fernie, tax investigations partner at BDO Accountants.

Any unpaid tax has to be paid by 31 January; if it's not, then interest is charged. Generally, as a rule of thumb, HM Revenue & Customs will agree to take payment for tax owed from adjusting personal PAYE codes. Up to £3,000 can be paid in this way. If your tax bill is over £3,000, then HMRC will usually ask for payment on account for the following tax year. The first payment on account is also due by 31 January, with a further request made for 31 July.