Out of control?
Greatly increased penalties now exist for submitting personal tax returns late to HMRC and it seems to me that those least likely to be able to afford them are most likely to incur them. It used to be the case that provided all tax was paid by the 31 January filing deadline (or if no tax was owed) then any penalty for late filing was waived. This is no longer the case.
Regardless of the tax position, the new penalty regime imposes a £100 penalty if the return is even 1 day late, then additional penalties of £10 per day if the return is more than 3 months late (up to £900) then a penalty of at least £300 if the penalty is 6 months late and another penalty of at least £300 if it is a year late. This could mean a penalty of £1,600 even if no tax (or a refund) is due.
I can see this happening to unrepresented people who perhaps understandably think they can ignore a tax return because they “pay all my tax through work or pension” or “only ever had small refunds not worth bothering with”.
Just as alarming, those submitting paper returns incur the same penalties only their penalty regime starts 3 months earlier on 1 November.
I know there’s a ‘tax gap’ to fill but isn’t a regime which could impose a £1,600 penalty on a pensioner who is actually owed tax a little out of control?Talk to Barnes Roffe today