HMRC proposes new penalty regime
HMRC is proposing a new “penalty point system” that will see those late in submitting information about their tax affairs fined £100 after four offences. Every additional point will result in a further fine. The taxman is also proposing a new regime for the late payment of tax. At present people are charged three fines worth 5% of any outstanding income tax after 30 days, six months and a year. The new penalties would be 4% after 30 days, 10% after six months and 15% after a year. Anita Monteith, a tax policy adviser at the Institute for Chartered Accountants, said that the new system is going to be a cash cow for the taxman. “A lot of retired people who run small businesses will give up and decide it’s just not worth it. The cost of all this is going to be met by businesses to save HMRC money. The administrative burden will be huge.” HMRC said that only “repeat offenders” will be targeted under the new penalty regime, which will be delayed for 12 months after the implementation of the digital tax system which begins in April 2019.