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Points on your licence? Points for late UK tax filing

If you are late filing or you miss the deadline to submit your tax return you will be given a penalty for late filing. The starting point for this penalty is currently an automatic £100 fine from HMRC.

Published on the 6th July, the draft Finance Bill included provisions to scrap this fine and replace it with a points based system, similar to what is used for minor driving offences. For each late filing penalty points would be given and a financial penalty would be imposed once the number of points exceeds the given threshold, also taking into account the taxpayers recent compliance history. The points would sit temporarily on the taxpayers’ record, and would be wiped after a given period of time. HMRC would also have the power to waive the points, or they could be struck off by successful appeal.

The timelines will depend on the tax in question, but the idea is the penalty points system will begin by applying to a number of taxes including VAT, income tax and capital gains tax. Corporation tax was not included in these initial taxes, but the same system is to be applied to corporation tax in the future.

Top tip Be aware of upcoming changes and adapt your business model accordingly

The system will hope to catch repeat offenders as oppose to one off mistakes as repeat offenders’ points will build up for each missed deadline or late filing.

For tax advice please contact Graeme Perry, Head of UK and Cross Border Tax.

 

Points on your licence? Points for late UK tax filing

If you are late filing or you miss the deadline to submit your tax return you will be given a penalty for late filing. The starting point for this penalty is currently an automatic £100 fine from HMRC.

Published on the 6th July, the draft Finance Bill included provisions to scrap this fine and replace it with a points based system, similar to what is used for minor driving offences. For each late filing penalty points would be given and a financial penalty would be imposed once the number of points exceeds the given threshold, also taking into account the taxpayers recent compliance history. The points would sit temporarily on the taxpayers’ record, and would be wiped after a given period of time. HMRC would also have the power to waive the points, or they could be struck off by successful appeal.

The timelines will depend on the tax in question, but the idea is the penalty points system will begin by applying to a number of taxes including VAT, income tax and capital gains tax. Corporation tax was not included in these initial taxes, but the same system is to be applied to corporation tax in the future.

Top tip Be aware of upcoming changes and adapt your business model accordingly

The system will hope to catch repeat offenders as oppose to one off mistakes as repeat offenders’ points will build up for each missed deadline or late filing.

For tax advice please contact Graeme Perry, Head of UK and Cross Border Tax.