Advisers cheer as HMRC moves away from automatic penalties
HMRC sets out stall to move away from automatic tax penalties, flagging PAYE and self assessment as examples
A MOVE from automatic tax penalties to a less rigid approach by HM Revenue & Customs has been welcomed by advisers.
The taxman has announced a “more proportionate approach” to small employers that miss PAYE fling deadlines. The latest news follows its acceptance of reasonable excuses” relating to self assessment missed deadline filings.
“We welcome the fact that HMRC are revisiting their approach to penalties and looking to focus much more on serious cases of abuse and persistent non-compliance,” said CIoT employment taxes sub-committee chair Colin Ben-Nathan.
The big shift that employers have had to make towards real-time PAYE filing has proved difficult, especially for small businesses where employers serve unpredictable shifts.
These onerous obligations, Colin Ben-Nathan said, require HMRC to be more “pragmatic” about penalty levies.
Anthony Thomas (pictured), chairman of the CIoT’s Low Incomes Tax Reform Group said: “HMRC’s announcement that they will accept reasonable excuses from taxpayers who are generally compliant without further probing is sensible, pragmatic and in line with what we have been calling for.
“Fixed automated penalties make no distinction between the deliberate non-complier and the person who makes a one-off mistake. This is neither fair nor proportionate. It is good that HMRC have recognised this.
Yesterday HMRC said that it would concentrate on more serious defaults on a “risk-assessed basis”, an approach it said was in line with its earlier HMRC penalties discussion document.
“This approach will enable HMRC to concentrate more resources on the more serious failures to comply, and to focus on educating employers about their filing obligations through targeted communications, webinars and Employer Bulletin articles,” HMRC stated.