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Friday
Apr092010

HMRC To Standardise Tax Penalties From April

I was chatting to a friend recently who reminded me of the inconsistent system of penalty fees within HMRC. Thankfully, HMRC have now introduced a standardised tax penalty scheme which should make it easier to understand - and easier for them to enforce. The new penalty schemes will apply to both individuals and companies.

Failing to declare taxable income or to register for tax already incurred penalties under the old scheme. However, this was not enforced in a standardised manner across the tax disciplines nor from individual to company. The new scheme will see this standardised for both individuals and companies.

There was already an inaccuracy penalty in place for taxes such as corporation, VAT and personal but HMRC are now extending it to almost all taxes. The area of concern for most people is if they’ve made an error on their return and worried about hefty penalty fines.

Human nature is that we will sometimes make mistakes. HMRC are aware of this and have said that if an error is genuine, they will wave the inaccuracy penalty. It does mean that you need to keep good tax records to be able to demonstrate that it was simply and error and not an attempt to evade paying taxes or concealing taxable income.

Good tax recording is a skill that many people can be hesitant to get to understand. Some people may also be uncertain or wary about completing their tax returns (personal or company). If you are one of these people, talk to one of our advisors here at St Matthew. We’ve been handling individuals and companies tax affairs for many years now and are able to assist you in completing your tax returns accurately so as to avoid any penalties.

 



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