HMRC says one million people have missed the January 31 self assessment tax return deadline, and will now face an automatic £100 fine.
Let joy be untrammelled!
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In a shocking turn of events, HM Revenue & Customs (HMRC) recently withdrew a staggering 36,000 penalties for taxpayers who missed the self-assessment deadline. However, this seemingly positive move hides a deeper issue: HMRC's abysmal customer service.
Here's what you need to know:
1.Record Penalties Cancelled: Last year, HMRC cancelled a record number of fines for late tax filings. These fines are automatically imposed when taxpayers miss the January 31 self-assessment deadline, resulting in a £100 penalty.
2. Helpline Delays: The surge in cancelled fines is directly linked to helpline delays. Many taxpayers struggled to submit their returns on time due to prolonged wait times when seeking assistance from HMRC. In some cases, callers faced hour-long waits, and letters went unanswered.
3. Reasonable Excuses: While missing the deadline incurs an automatic fine, taxpayers can appeal if they have valid reasons. These "reasonable excuses" include the death of a close relative, serious illness, or issues with HMRC services.
4. Taxpayer Frustration: Accountants and tax experts have criticised HMRC's declining service quality. Some describe it as "no longer fit for purpose." The reduction in helpline support just before the self-assessment deadline left millions with limited phone assistance.
5. Unanswered Calls: During the busiest month for tax returns, HMRC received over 1.2 million calls in the eight weeks leading up to January 31. Unfortunately, more than 800,000 of these calls were abandoned by taxpayers or ended by HMRC.
6. Impact on Low-Income Individuals: Late filing penalties disproportionately affect low-income taxpayers, many of whom have no tax liability. The stress caused by fines, especially during challenging times, is concerning.
In summary, HMRC's customer service chaos has penalised Britons with automatic fines. Urgent improvements are needed to restore trust and ensure fair treatment for taxpayers.
Tax does have to be taxing.
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This thread shows that HMRC is fining people on low incomes (who owe no tax) for not submitting a tax return.
Our new report: 40% of all HMRC late filing penalties charged to people who don't earn enough to pay tax.
— Dan Neidle (@DanNeidle) June 26, 2023
420,000 penalties charged to people on low incomes over the last four years. Article here: https://t.co/khNZVStrCO
Thread follows
The UK tax system is supposed to be progressive, meaning that those who earn more pay more tax. But a new report has revealed that 40% of all HMRC late filing penalties are charged to people who don't earn enough to pay tax.
This is a scandal. It means that people who are already struggling to make ends meet are being punished for not filing a tax return, even though they owe no extra tax.
There are a number of reasons why people might not be able to file their tax returns on time. They might be working multiple jobs, caring for a family, or simply struggling to keep track of their finances. Whatever the reason, it's clear that these people are not trying to evade tax.
But HMRC doesn't seem to care. They're happy to slap these people with hefty fines, even though they know that the fines will only make their financial situation worse.
This is not just unfair, it's also counterproductive. Charging people who don't earn enough to pay tax with late filing penalties is only going to drive them further into poverty.
It's time for HMRC to change their ways. They need to stop targeting the poor and focus on those who are actually trying to evade tax.
In the meantime, if you're one of the many people who have been hit with a late filing penalty, don't give up. You may be able to appeal the penalty if you can show that you had a reasonable excuse for not filing your return on time.
The tax system should be there to help people, not punish them.
These people are already struggling to make ends meet, and now they're being punished for not being able to file their tax returns on time. It's a disgrace.I urge everyone to contact their MP and demand that they take action to stop this injustice. Go back to how the law was before 2011, when late filing penalties would be cancelled if, once a tax return was filed, there was no tax to pay.
Tax does have to be taxing.
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HMRC, for reasons best known to itself, charged a taxpayer with three penalties for filing too early.
This decision was quite rightly reversed on appeal.
"In the hearing, HMRC agreed that the returns had been filed on 4 September 2020 and explained that the penalties had been issued because the returns had been filed too early and were therefore treated as not having been filed correctly and in time. The return for March 2021, also filed on 4 September 2020, had been accepted but HMRC were unable to explain in the hearing why this return had been accepted but the returns for the earlier periods, filed in the same submission, had not been accepted."
HMRC yet again wasting time and taxpayers' money on pursuing half arsed vendettas.
Tax does have to be taxing.
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Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.
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One week before the deadline HMRC see sense by announcing that Self Assessment "customers" (or as normal people know them, "tax payers" wishing they could take their custom elsewhere!) will not receive a penalty for their late online tax return if they file by 28 February
— CheapAccounting.co.uk expert - Elaine Clark (@cheapaccounting) January 25, 2021
The 31 January self assessment deadline is almost upon us, if you miss that you will be fined.
The Express reports that UHY Hacker Young looked into HMRC's latest figures, and found HMRC cancelled over 60 percent of late payment penalties last year.
As a result of these findings, UHY Hacker Young urged taxpayers to appeal if they feel any fines levied against them were wrongly imposed.
In monetary terms, UHY Hacker Young revealed that of the £275million in penalties levied last year, £167million was later completely cancelled.
NB HMRC has confirmed that personal or business "pandemic-related"
disruption may be a reasonable excuse for late filing of tax returns.
Tax does have to be taxing.
Tax Investigation Insurance
Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.
You have the peace of mind knowing that your accountant's (your tax return agent) fees will be paid by the insurance without any Excess for you to find.
Tax Investigation Insurance is an insurance policy that will fully
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"HMRC’s decision was, in my view, flawed, because it did not take into account a relevant fact, being that the appellants’ tax agent was not paying attention to his clients’ affairs between April 2019 and the time the tax returns were filed, due to his father’s illness and death. This means that the Tribunal can reduce the penalties if it thinks it right because of special circumstances."
“Although HMRC has been granted a time extension it is still not possible to provide a detailed response to these directions. These penalties were automatically issued by HMRC’s computer systems therefore we cannot provide a named person in respect of individual cases.Why did HMRC take two months to come up with an answer that was obvious to all from the beginning?
The computer recorded the penalties and issued penalty notices on 19/04/2017 in accordance with HMRC’s policy in respect of late filing of Employment Intermediary returns.”
