*

search our site

 

HMRC forego small fry to concentrate on bigger fish

freelancesupermarket.com newsroom

RSS 08 June 2015
As highlighted in our article last week, the tax man is using big data to gather more information about us all, as tax payers. The intention of HMRC's discussion document about fines is another step to that end. However, no one expected the first step, wiping out 890,000 fines of £100, would be so big!

In an unprecedented turn of events, HMRC is to look again at its fines procedure. Anyone operating in the 2013/14 tax year who filed a late self-assessment (after January 31st, 2105) may benefit from the changes.

The first wave of correction is huge. Almost 900,000 individuals who were late with their tax return are to let off the hook by the taxman. Providing an individual has a reasonable excuse*, HMRC has informed staff to wipe the fine off the records.

What is a reasonable excuse for missing self-assessment deadlines?

*In an attempt to quicken the appeals process from an internal perspective, and to work on "higher priority post", HMRC has added further 'reasonable excuse' to its list of those accepted without contention.

A move that will please many is that issues with the taxman's online facility is now listed as a viable reason.

There are also reasons stated that the taxman will categorically not accept. But in an attempt to lessen the load for future years, the HMRC website has doubled the quota, now listing six acceptable reasons for late self-assessment filing, all told.

Formal announcement follows leaked February memo

Way back in February, The Telegraph revealed that the plan to scrap this round of fines was imminent. A leaked internal memo to the paper confirmed the extent of the problem.

However, it's taken until the 5th June for the tax office to confirm the details. The main reason for that is because of the discussion document that was open until May. It's now closed for discussion, but the 26-page pdf is still available for download.

The reason for the move, according to said document, is that the current fine system doesn't meet current objectives.

Yes, the fines are imposed as a deterrent and to highlight how important filing self-assessments on time is. But the implementation of those fines also has to be "cost effective, fair and proportionate".

It's this target that the current structure is missing, preventing the department from pursuing greater tax avoidance offenders.

The move will also extend to RTI for PAYE employers this week, according to the announcement on the HMRC website.

We'd love you to stay in touch - why not subscribe to our updates?

To subscribe to our weekly newsletter, simply include your name and email address below. You can also follow us on Twitter, Facebook and YouTube.

freelancesupermarket.com services

showcasing freelance services

freelancesupermarket.com

set flsm to your home page

add flsm to your favorites

[loading]