Treasury replaces tax return fines with points-type system
The Treasury will soon replace the current £100 fine for the late filing of self assessment tax returns with penalty points similar to the penalty system currently in place for UK driving license offences. The aim from the Treasury is to focus their attention on serious tax avoidance rather than smaller businesses who may have made simple errors with their returns.
Last tax year, 840,000 people missed the 31 January deadline and were fined for doing so.
The Treasury’s plans were revealed in the Red Book, which was published alongside the budget this week, and will be outlined by the chancellor within the next few weeks.
“This will ensure that the system is fair, simple and effective across different taxes. Final decisions on both measures will be taken following this latter consultation.”
It continues: “If a customer achieves a sustained period of good compliance before a penalty is triggered, the points total will be reset to zero.
“A sustained period means that a number of submissions are provided on time for a set period.”
An HMRC source said “We want to take a holistic approach and not penalise people who trip up and go after people who really don’t care about playing by the rules.”