The FT reports that the Low Incomes Tax Refrom Group (LITRG) has described HMRC's automatic £100 fine for late tax returns as “nothing short of oppressive”, and has urged HMRC to overhaul the penalties imposed on nearly 1m people a year.
LITRG correctly notes that taxpayers, who cannot afford professional advisers, face being fined had missed the deadline because of ignorance, ill health or bereavement.
Additionally, around 200,000 people last year missed the deadline because they failed to press the “submit” button when they filed online.
HMRC announced plans in February to consider “whether we could better differentiate between deliberate and persistent non-compliers and those who might make an occasional error for whom alternative interventions are more appropriate”.
There is a world of difference between a taxpayer who misses a deadline by a day or two and someone who has made no attempt to comply at all.
Automatic fines should not be used as an easy means of generating extra revenue.
Tax does have to be taxing.
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