An end to penalties for paying your tax late sounds like a dream come true, but it could be a reality for many taxpayers in the years to come. HMRC has launched a consultation on plans to treat taxpayers more fairly – and, in particular, to recognise the good record of those who normally fileRead More
An end to penalties for paying your tax late sounds like a dream come true, but it could be a reality for many taxpayers in the years to come.
HMRC has launched a consultation on plans to treat taxpayers more fairly – and, in particular, to recognise the good record of those who normally file their tax returns and pay their tax bill on time.
At present, being late by a single day can incur an immediate financial penalty, but this remains the same if you are anywhere between one day and three months late.
The argument is simple – if you have always filed and paid on time in the past, and go just one day over the deadline, you should get the benefit of the doubt.
In contrast, if you are consistently three months late paying your taxes, you should be subject to stricter sanctions than those one-off offenders who would currently face the same financial penalty.
The consultation opened on February 2nd and runs until May 11th 2015, so there’s still plenty of time to make your voice heard, if you have an opinion.
It is worth remembering that the deadline for filing tax returns is not an especially short one – you can file anytime between April and the end of the following January, so there’s generally no excuse for leaving it to the last minute.
And if a legitimate incident or other delay means you miss the deadline unavoidably, you can already appeal to HMRC for leniency.
Under the new system though, you would accrue driving licence-style ‘points’ for initial breaches of the rules, and only once enough points have accrued will you face a fine.
It’s an unusual move for a government keen to appear firm on late payment in general; it will be interesting to see in May what the feedback from interested parties might be.