HM Revenue & Customs (HMRC) is currently reviewing the tax return system, with the intention to waive the £100 fine for those who have a ‘reasonable excuse’ for filing a late tax return. The new proposal aims to help change the way in which penalties are issued, as a means of promoting a fairer system. Hundreds of thousands of UK tax payers have been affected by HMRC’s tax payer legislation. Previously people who appealed against the £100 fine faced a two to three week scrutiny of their tax affairs before receiving a decision. However, this year HMRC have taken a more proportionate approach and in circumstances where the individual has a feasible excuse for submitting their return late, HMRC have accepted the excuse without further investigation and cancelled the penalty.
An estimated 890,000 people have potentially benefited from this approach for missing the January 31st deadline. HMRC are continuing to review the current automatic fine system. Currently, if an individual is just 24 hours late submitting a tax return they are fined £100, the same penalty as someone who has missed the deadline by more than a month. This applies even where the individual has no tax to pay. HMRC have agreed that this is unfair to those who have attempted to submit their tax return on time, as opposed to those who have not made the effort. “We want to consider whether we could better differentiate between deliberate and persistent non-compliers, and those who might make an occasional error” says HMRC.
If you have been charged a penalty and believe you have reason to appeal, you can find out more on how and what constitutes a ‘reasonable excuse’ in our previous article ‘Want to Appeal a Tax Decision?’ or contact firstname.lastname@example.org who can advise you.