Taxman plans penalties for late submission of tax returns
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- Published: Tuesday, 18 September 2018 07:41
- Written by News Editor
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HMRC have plans to introduce a points-based penalty system for late payments by businesses and individuals for corporation tax, income tax and self-assessment. As with the existing penalty regime, there will be a ‘reasonable excuse’ get-out, but like the current system, inability to pay and reliance on a third party are not reasonable excuses.
In a statement explaining the thinking behind the new system, HMRC said: ‘The changes will ensure that people who pay late can avoid a penalty if they act to make arrangements to pay, and that those that do not will receive a penalty that is proportionate to both the value of the debt and the amount of time it is outstanding for. The measure is designed to encourage those who cannot pay to agree a Time to Pay (TTP) arrangement as quickly as possible and only penalise those who do not.’
First charge:
Second charge:
A second charge will also become payable and will be calculated on amounts outstanding from day 31 after the payment due date until the outstanding balance is paid in full. Any TTP (Time to Pay arrangement) agreed during this period will also result in future penalties being suspended from the date the TTP was agreed.
Heidi Marshall, head of the dental team at Dodd & Co and Secretary of NASDAL (National Association of Specialist Dental Accountants and Lawyers) commented, “These changes illustrate the need for you or your accountant to be in communication with HMRC and to not bury your head in the sand or ‘hide’ from the debt if there any issues. As of yet, there is no date for the launch of the points-based system for non VAT taxes or details of the rates at which the penalties will be charged but watch this space.”
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