What are the ATED penalties?
Posted on 21st September 2023 at 09:46
We’ve described that for our typical property entrepreneur clients, there is no tax liability for the Annual Tax on Enveloped Dwellings (#ATED) return, but you still must file the return and that’s where the penalties arise.
Late filing and late payments incur their own set of penalties, so you can face double jeopardy of a late filing penalty and if tax is due, a late payment penalty, which can be significant.
For late filing, the charge are as follows as per FA 2009 Schedule 55:
• £100 if its late by 1 day
• daily penalties of £10 per day for 90 days if its late by 3 months
• a ‘further penalty’ of £300 or 5% of HMRC’s estimate of your liability to tax (whichever was the higher) if its late by 6 months
• a second ‘further penalty’ of £300 or 5% of HMRC’s estimate of your liability to tax, (whichever was the higher) if its late by 12 months
If the tax liability is different from the estimates for the 6 month and 12 month penalties, then this will automatically be re calculated.
The late payment penalties for the return period are the total of:
• 5% on tax unpaid at the penalty date if its late by 1 day and
• any 5 month ‘further penalty’ - 5% on tax unpaid 5 months after the penalty date and
• any 11 month ‘further penalty’ - 5% on tax unpaid 11 months after the penalty date.
This now concludes the series of seven articles on ATED and we hope that you have found these useful and it’s increased your knowledge in our usual plain English manner.
If you’re a client of Property Tax Advice, we can have an overview conversation about this, or we can be instructed to handle this for you. Contact jenny@property-tax-advice.co.uk or your regular consultant accountant.
#ATED #ated_penalty
Tagged as: ATED
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