By Jonathan London on 26th May 2015

HMRC criticised for late tax return fines

A key charity has raised concerns about the HMRC giving out fines for late tax returns.

The Low Incomes Tax Reform Group has criticised the use of automatic £100 fines to penalise close to one million people each year despite many having legitimate reasons for submitting their returns late (unlike these!).

According to research many taxpayers faced “a very significant amount of distress, fear and worry”, especially as the fine system allows penalties for not filing your tax return to increase from £100 to up to £1,200 within six months.

In February, HMRC did confirm plans to examine “whether we could better differentiate between deliberate and persistent non-compliers and those who might make an occasional error for whom alternative interventions are more appropriate”.

It added: “There are ‘reasonable excuse’ provisions that can remove penalties, but the rules may need updating to better support those genuinely wanting to comply.”

New technology and the use of real-time information system could play a role in allowing the HMRC to apply a more sophisticated approach, as data would be more accurate and up-to-date.

Jonathan London Written by Jonathan London

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