There are two certainties in life, death and taxes.
The Treasury has, over the last 30 years, managed to combine the two via imposing the iniquitous IHT. However, until now, bereaved families have been at least given some time to pay it with penalties for late payment (six months after death) never going beyond base rate.
Sadly, since the government has managed to bankrupt the country it is now desperate for every penny that it can raise in order to pay its own wage bill. As such, HMRC will be increasing the rate it charges on IHT late payments to 3% (2.5% above base).
Ironically, where there is a tax overpayment HMRC will only pay 1% below base rate, with a floor of 0.5% (ie 0.5% at current base rate).
HMRC say:
"Interest is not a penalty but compensation for tax paid late.
We are streamlining the rates charged and paid for interest to simplify and make things fairer for customers.
This has been subject to extensive consultation over the last 18 months and has been largely welcomed by customer groups and their representatives.
The alignment of rates that will take place in September will mean that all tax paid late is subject to interest at the same rate, so ensuring all taxpayers are treated equally.
And in the interest of fairness we will also be introducing a repayment interest floor, to ensure that any taxpayer overpaying tax will receive interest."
- How is it fair to penalise the bereaved in this manner?
- How is it fair to charge 3% for late payments, but only pay 0.5% when tax has been overpaid?
- How can anyone seriously describe taxpayers as "customers"?
- How did HMRC manage to issue such a bullshit statement whilst keeping a straight face?
Tax does have to be taxing.
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The thing that scares me with this is that some probates take much longer than 6 months to value and identify the proportion of tax to be paid.
ReplyDeleteAgree with last. Businesses have 9 months to cough up CT and they keep (or are supposed to) full records so it should be fairly easy.
ReplyDeleteFor estates there are often poor records, wills to find, heirs to track down, assets to trace, accounts to close, houses to sell and legal dusputes to sort out this timescale is totally unreasonable.
Whoever thought this up is an utter scumbag.
Funny they are so busy aligning things that should not be aligned but failing to align what should be aligned, ie the ridiculous miriad of different rules for every occasion.
ReplyDelete...and the due dates only come in 3 months after probate is reached, so plenty of time to pay up! the whole reason behind the higher interest on underpayment/nonpayment and lower rate on overpayment (currently 0% on income tax!) is to stop people treating HMRC like a bank, and getting a refund (lump sum payment with interest gross of tax?) each year for their holidays...although they'd best put the claim in about 4 months before the holiday if they did...
ReplyDelete