Until the Finance Act 2011, HMRC rules effectively meant that if you did not have an outstanding tax liability at 31st Jan, your penalty was limited to £100 fine.  People who knew they were not going to file their returns in time were often advised by accountants to pay an estimate of the tax liabilty plus the £100 fine in advance.  This meant they limited the penalty owing to HMRC.

This is no longer the case.  New rules mean that penalties are no longer limited by the tax you owed on 31st Jan.

Anyone who was counting limiting their penalty through the method described above should be aware that the rules have changed.  Whilst the changes do not make a huge difference in the first three months that a return is late, they make a big difference thereafter.