News of “HMRC late penalties hitting the self-assessors” is getting rounds now days. This news takes place when Moore Stephens (a chartered accountancy firm) obtained their figures from revenue and found that late penalty for recipients are increased by 14%. According to Moore Stephens (the chartered accountancy firm) - There are around 291,000 self-assessors who are penalised by HMRC but this figure takes a jump and arrive at 331,000 for the 2016/17 tax year (as per latest figures by HMRC).
Officers Like Robots
Taxpayers are getting afraid from the inhuman behavior of taxman after 14% rise in the late penalty amount of self-assessment. As per the disclosures made by the tax payers, HMRC is running from every situation and acting more like Robots.
According to contractor accountancy firm - Previously, 283,000 people were penalised in 2014/15 and this has taken a leap to 331,000 in tax year 2016/17. Not only the number but late penalty amount for self-assessors has also taken a rise.
If we talk about the previous year, only 14% of late payment fines are cancelled by HMRC which is considered low as compared to the cancellation figures we saw in previous 2 years i.e. 16% & 18%.
This somewhat suggests that HMRC is less sympathetic towards the taxpayers and even for many of those who are having genuine & legitimate reasons, said “Moore Stephens”. One more sign which shows HMRC’s unsympathetic attitude towards taxpayers is that they are restricting the grounds for those taxpayers who are having reasonable excuses for late payments.
All For Strictness
Moore Stephens associate “Tim Wood gates” also adds that if any self-assessor even ready to pay the late penalty, he might not be able to pay it because of the following reasons –
- Not receiving HMRC reminders
HMRC should clear the tax payers about “What constitutes” a “reasonable excuse”? Unless they will not update taxpayers regarding it, the problem will remain the same. The most important question every taxpayer wants to ask is “why there is so strictness on taxpayers who has genuine reason for late filing of self-assessment tax bills”? Whether they are increasing the problem or really looking for the solution.
According to Mr. Wood gates, most of the taxpayers are intended to pay tax but unable to pay it on time as economy is struggling.
As per chief accountant of free agent “Emily Coltman”, many of the taxpayers ask “why they have to make payments on account” as it can put a dent on their cash flow.
As far as payments are concerned, it confuses most of the new self-assessment tax payers. If someone has to pay more than £1000 of tax and doesn’t pay tax at source find themselves in a situation where he has to pay not only the total tax amount due for that relevant year but half as much again on account for the following year.
Not The “END”
Self-assessors need to pay fines to HMRC on the basis of the following -
- Self-assessors who are late in doing payments to HMRC by 30 days need to pay a fine of 5% on all outstanding tax.
- If 6 months late, you need to pay a fine of 10% on all outstanding tax.
- If 12 months late, you need to pay a fine of 15% on all outstanding tax.
Sometimes tax payers don’t realise that in addition to filing their tax returns, they must pay their taxes to HMRC which is altogether a separate process. As per Ms. Coltman “Filing the return is not the end”.