Around 10 million individuals are required to complete a Self Assessment tax return each year.

The particular information about cost per case is only available at a disproportionate cost. But although HM Revenue and Customs (HMRC) does not have this information readily available the average cost of processing a personal income tax return was published by HMRC in the ‘International Tax Benchmarking Study’ in 2011 which is available on the HMRC website at: www.hmrc.gov.uk/research/benchmarking.pdf

8,300 Limited Liability Partnerships filed their 2010-11 Income Tax Self Assessment tax returns after the due date.

2010-11 is currently the latest tax year for which HM Revenue & Customs has a verifiable data set of partnership information.

I refer to my previous answer on 3 June which stated "The Government is not currently considering a rule to terminate an individual's employment status and end related benefits." Individuals who are self-employed are required to complete an annual self assessment tax return. Failing to comply with their obligations under the self-assessment regime does not affect their right to claim certain statutory benefits.

The class of National Insurance contributions paid by employees (Class 1) and the self-employed (Class 2)

determines the contributory benefits to which they are statutorily entitled. In the case of a self-employed person who has paid Class 2 contributions on time, there is currently no statutory provision to withhold contributory benefits because a self-employed individual has failed to submit a tax return and to pay resulting penalties.

Where an individual changes their employment status, because of a change in their economic activity, the change in the class of National Insurance contributions paid will automatically feed through to their National Insurance record and be identified by the Department for Work and Pensions for the purpose of benefit entitlement.

A new late filing penalty regime for Self Assessment (SA) tax returns was introduced for the tax year 2010/11 onwards as part of ‘The Review of HM Revenue & Customs (HMRC) Powers, Deterrents and Safeguards' which ran from 2005 to 2012. Given the recent introduction of the new penalty regime, there has so far been no specific review of SA penalties. However, as with all aspects of the tax system, HMRC keeps its penalty regime under constant review.

Where self-assessment (SA) returns remain outstanding after the due date (31 January), a regime of penalties commences. Late-filing penalties are charged at an initial £100. If the return is still outstanding after three months, daily penalties of £10 per day are charged for up to 90 days. At six months late, a tax geared penalty of 5% of the liability shown on the return, or a minimum of £300, is charged, whichever is greater. At 12 months, a tax-geared penalty of 5% of the liability shown on the return, or a minimum of £300, is charged, whichever is greater.

These penalties will be pursued by a variety of interventions used either singularly or in combination through letters, telephone calls and text messages. The interventions may be undertaken within HM Revenue & Customs (HMRC) and/or by an external debt collection agency. If the penalties remain unpaid, further interventions can be made by HMRC, including calling at the customer’s home or court action to secure the completed SA return and payment of the penalties.

The Government are not currently considering a rule to terminate an individual’s employment status and end-related benefits. An individual’s employment status is defined by the terms and conditions under which they are engaged. The Government believe that an individual’s true economic activity should determine their status for tax and national insurance purposes and that the regime outlined above is sufficient to ensure self-employed individuals make the appropriate returns.

The vast majority of self-assessment (SA) taxpayers can complete their tax returns online, by using HM Revenue and Customs (HMRC) Self Assessment online service.

A small proportion of SA taxpayers (including Members of both Houses of Parliament) are not able to complete file tax returns online because they need to complete special dedicated pages. Developing the necessary forms and links to departmental computer systems would carry a disproportionate cost to HMRC at this time.