Penalty For Accidental Late Submissions A Thing Of The Past?

www.greenandco.comThe initial £100 penalty for late submission of self-assessment tax returns could be abolished under new Government plans. Under the current system, which has been in place for the last 20 years, someone who files their return 24 hours later than the midnight deadline, will pay as much of a penalty as someone who is up to 12 weeks late.

HMRC admits that the current way of dealing with late submissions is punishing the honest tax payers who miss by a day as either a simple mistake or an ‘uncharacteristic failure’.

One of the radical new ideas being considered by HMRC is whether to implement a penalty point style system, such as is currently being done with motoring penalties. This would be designed in a better way to punish the repeat offenders, rather than those who make a one-off error.

HMRC themselves admit that there is no distinction being made between the customers who miss by a day, and those who make no attempt to comply at all.

The proposals could mean thousands of taxpayers who fail to file their self-assessment forms on time each year could escape a financial penalty.

Prior to the 31st January deadline for online self-assessment tax returns for 2013-14, 10.2 million returns were filed on time, but 890,000 were overdue.

Chas Roy-Chowdhury, of the Association of Chartered Certified Accountants, said the existing penalties were an unjust source of income for the Government. He said “We seem to have lost sight of the fact that the taxpayer is the unpaid administrator of tax compliance and we should be looking to smarter ways of dealing with late filers.”

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Photo credit: freedigitalphotos.net

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