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Taxman relaxes late payment penalties
by Susie Hughes at 11:47 01/06/15 (News on Business)
Tax officials are no longer checking why someone was unable to submit their self-assessment forms on time, as long they provide a 'reasonable' excuse, according to a leaked memo.
Every year in the run up to the January 31, HM Revenue and Customs runs a high profile campaign to ensure that tax payers meet their filing obligations, usually involving the threat of an automatic fine of £100 for missing the deadline.

Now, the Daily Telegraph has published a leaked memo to HMRC staff, who were told to write off the £100 charge without further investigation if people with seemingly mitigating circumstances appealed after paying their tax bill.

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It is revealed as HMRC faces a backlog of almost a million letters from taxpayers.

A spokesman for HMRC told the Telegraph that they wanted to focus more of their resources on investigating major tax avoidance and evasion rather than penalising ordinary people who are 'trying to do the right thing'.

HMRC has always allowed some leeway for reasonable excuses for late filing, but these have tended to be quite tight in the past. For example, they have cited: the death of a family member shortly before the deadline or an an unexpected stay in hospital.

Previously , appeals against late payment penalties have been time consuming for officials.

Now the leaked memo shows a different approach. It said: "Our penalty regime is intended to influence customer behaviour, but also be clear and cost effective, fair and proportionate.

"The current way of managing penalties does not meet these objectives, and so we have decided to take a more proportionate approach where a customer has filed their return late, and then appealed against their penalty"

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Susie Hughes © Shout99 2015


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