Missed a year of tax filing -- what are the implications?

If someone (!) had neglected to file a tax return for last year (2011), and that person were to sit down and immediately rectify the situation by submitting a return a year late and paying what was owed, what would it mean for that person?

Would they have a penalty to pay? Would it affect their US credit score?

It's hard to say because it depends on a number of factors.  Whether taxes were owed, how much was owed, whether the IRS decides to apply the penalty and interest to the amount owed, etc.  There is a potential penalty as well as interest charged.  I don't think it affects your credit score at all unless you don't pay.

Thanks for the quick response. One more question: Am I right in thinking that the tax treaty between the US and UK means that I don't owe the US govt any taxes on ££s I earn in the UK, provided it's less than some astronomical amount?

The saving clause in the treaty states that the United States retains the right to tax its citizens as if the treaty did not exist.

In some limited circumstances it can however help ameliorate the effects of double taxation.

Thanks for the quick response. One more question: Am I right in thinking that the tax treaty between the US and UK means that I don't owe the US govt any taxes on ££s I earn in the UK, provided it's less than some astronomical amount?

In many cases the foreign earned income exclusion and foreign tax credits will offset any US taxes making your US tax bill small and maybe even zero. If you have US or UK based investments or pensions it gets a bit more complicated. As penalties for late filing are assessed as interest on any late taxes, if you have zero US tax due there will also be zero penalty. File your US tax return asap.