By Jonathan London on 9th February 2015

Late tax return fines may become a thing of the past

Following last week’s news that 890,000 taxpayers, including freelancers and contractors, are facing an automatic £100 fine for missing the self-assessment tax return deadline, HM Revenue & Customs (HMRC) may make the monetary penalty a thing of the past.

HMRC has suggested that instead of taxpayers being hit by automatic penalties, that a system of penalty points may be a better way to handle those who are late only by a few days due to what may be an honest mistake. The body hopes that replacing the fine would encourage people to pay their taxes sooner and give them a better chance to do so.

HMRC said: “We know that the vast majority of customers meet their obligations in full and on time, and that penalties are only applied to a small minority of people and businesses. We want to make sure our approach works as well as possible.…

However, monetary penalties would then apply to those who do not pay their tax bills time and time again in a bid to challenge determined tax dodgers.

HMRC added: We want to consider 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.…

Alongside the option for penalty points, HMRC has said that it will also look to extend its list of reasonable excuses to accept when tax returns are filed late. At present an unexpected stay in hospital, death of a spouse and a fire are reasons which HMRC will currently accept.

The new plan to impose penalty points will be open for the public to voice their opinion on until May 11th.

Jonathan London Written by Jonathan London

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