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2013.01.18 - United Kingdom: Deadline for filing of LLP Tax Returns – 31 January 2013.

 

Owners of English LLPs should be aware that, although Limited Liability Partnerships are exempt from tax subject to certain criteria, this does not relieve them from the obligation of preparing and filing appropriate financial reports to the company register (Companies House), and Tax Returns to the UK tax authorities (Her Majesty Revenue & Customs).

The procedure and deadlines of tax return filing are stated by the Taxes Management Act 1970; in particular, LLPs must file their tax returns (form SA800) for 2012 not later than 31 January 2013.

Unless form SA800 is filed by the above deadline, HMRC imposes penalties on the LLP designated members to the amount of GBP 100. In such cases, the penalty accrues not only on the LLP member responsible for filing, but also on all the other members, therefore the penalty fine amount should be multiplied by the number of the company members.

Further on, the penalty increases in accordance with the rules set by HMRC and may exceed GBP 1,500 for each member.

In theory, there are justifying circumstances, where HMRC may decide not to charge a penalty for failure to file a tax return on time; for example, the member’s disability, force majeure or a failure in the HMRC software (which is highly unlikely). But in practice, if the company had a real opportunity to file its tax return, then the probability that HMRC will take a justifying decision is very low.

Therefore, to avoid the accrual of substantial penalties, LLPs must file their tax returns on time, i.e. by 31 January 2013.

INTERNATIONAL OVERSEAS SERVICES comments:

It is important to emphasize the high level of organization and accuracy in the work of both the Companies House and Her Majesty Revenue & Customs. The precision shown by these government agencies undoubtedly deserves respect, and even many private companies might envy for such level of organization of work.

At the same time, considering the above, it is easy to predict that in case of failure to file the required returns, the above penalties will be assessed accurately and strictly in compliance with the established rules. In particular, we quote HMRC:



Example
Mrs A's tax return is due on 31 January 2013 but HMRC doesn't receive it until 5 August 2013.
It is over six months late so she will have to pay all of the following:
£100 fixed penalty
£900 penalty - this is £10 each day from 1 May to 29 July, when the maximum 90 day penalty is reached.
£300 or 5 per cent of the tax due - whichever is the higher

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