49% of Automatic Late VAT Submission Fines Incorrect

It seems that HMRC is having a wee spot of bother wrt fining taxpayers for late VAT submissions, as in 2013 around 49% of appeals (8,000 cases) on automatic fines were successful.

UHY Hacker Young, which conducted the research into the incorrect fines, claimed that the computer based system used by HMRC was issuing fines for late submissions, regardless of circumstances.

Simon Newark, a partner at UHY Hacker Young, is quoted in economia noting that the onus on the taxpayer to prove his/her innocence does not go down well with the taxpayers:

“That’s perceived by taxpayers as being unfair, but unfortunately, that’s what the law says.

In a lot of borderline review cases HMRC is rubber-stamping the automatic penalty. 

Taxpayers should be allowed to explain their situation first before they are railroaded into a system of fines and penalties.”

However, HMRC is of the view that the system is “working well.”

An HMRC spokesperson said:

"Statutory penalties are sent out when a return or payment is late. Late receipt is a fact that triggers the penalty but of course we accept there can be valid reasons for being late and the taxpayer simply has to show they had a reasonable excuse for submitting late. 

If we accept the reason - and we do in 50% of cases - then there is no penalty to pay. 

This shows the system working well."

Wouldn't it save time and effort to check the reason for the late payment first, before automatically issuing fines?

Actually, no it wouldn't, because HMRC is aiming for maximum automation and minimum staffing levels.

Good luck to all if HMRC is allowed to raid bank accounts for unpaid tax!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"