HMRC wrongly fining individuals for late tax returns

21 August 2017

It has been reported that HMRC has wrongly registered approximately 963,000 taxpayers in the self-assessment (SA) tax system and subsequently fined those individuals charges for not filing their tax return. It is estimated that those who were incorrectly put in the SA system were pursued for penalties which averaged at £300 per individual.

There are currently 11 million people in the UK registered to pay their tax through the self-assessment system. In 2015/16 HMRC reportedly received £283m from fines which were issued due to late return filing.

In relation to the reports, Nicky Morgan MP, Chairman of the House of Commons Treasury Select Committee made this comment;

I appreciate HMRC have to deal with millions of taxpayers but they need to focus on those who really are trying to evade the tax system, not those who shouldn't be filling in forms at all.

The Penalties

Penalties are issued if you are registered to send a tax return and you fail to comply with the deadline for submitting the return or paying the tax which is due.

If your tax return is up to 3 months late you will be issued with a penalty of £100. The penalties will increase if the return is submitted any later than 3 months after the deadline or if the tax bill is paid late.

Penalties can be appealed if there is a reasonable excuse for the late filing and/or payment.

Aspire Comment

The comment made by the Chairman of the House of Commons Treasury Select Committee in relation to the systematic failure suggests that Government want HMRC’s primary focus to be on individuals who evade the UK tax system, as opposed to those being unfairly treated by the system, such as individuals being pursued for fines which are not due.

It is important that you understand your position in relation to paying the tax due on your income to avoid any mistakes being made. 

Are you concerned about whether you should be registered for self-assessment? Do you need help submitting your self-assessment, or do you require assistance with appealing against a penalty? Get in touch with Aspire to discuss how we can help.