Tax penalties are one of the most frustrating and expensive mistakes you can make. They are issued to you in the UK when you need to file a tax return and HMRC have issued you with a filing requirement.
Most UK Superyacht Crew will not have to pay income tax on their salaries and so this is even more frustrating when you get it wrong as the fines are almost always more than the tax you would owe in the first place!
Penalties take three forms.
The first is a penalty for not filing the return on time.
The second is a penalty for not paying any potential tax on time.
The third is a discretionary penalty based on the actions involved in not filing the return by the deadline. This means that even if you don’t have any tax to pay the first type of penalty can still apply. The first two types of penalties are fixed and the third is varied depending on if you have acted in a deliberate or malicious way.
The below table summarises all the penalties that can be applied. Showing how penalties can reach £1,600 even if there is no tax due on the return. Once a tax return is more than 12 months late penalties can be applied based on the individuals actions.
| Late filing penalty | Late tax payment penalty | Penalty |
| Missed 31 January filing deadline | £100 | |
| 30 days late after 31 January | 5% of tax due | |
| 3 months late | £10 per day for up to 90 days (max £900) | |
| 6 months late | 5% of tax due or £300, if greater | |
| 6 months late | 5% of tax outstanding at that date | |
| 12 months late | 5% of tax due or £300, if greater | |
| 12 months late | 5% of tax outstanding at that date |
The moral of the story to avoid these penalties is to make sure you file your returns on time. For UK crew this should be a total no brainer as there is literally no negative to filing a return. All 2016/17 UK tax returns should be filed by 31 January 2018. Older tax returns should also be filed as soon as possible to minimise penalties.
If you are unsure about your tax return position, what you are supposed to be doing, or would like some additional help, please get in touch with Crewfo at info@crewfo.com