Advisers are celebrating HMRC’s new acceptance of “reasonable excuses” for late filing of self-assessment tax returns and their step away from automatic penalties. This seems to be an acknowledgement that there is a marked difference between people who are trying to avoid paying tax and those who have just missed a deadline.
In their own words, HMRC are looking to maintain a “more proportionate approach”, which will particularly benefit small businesses that have been wrestling with the recent introduction of ‘real time’ PAYE. This has been a big change for employers and has been difficult to administer, particularly in companies with complicated shift patterns.
The Chairman of the CloT Low Incomes Tax Reform Group, Anthony Thomas summarises succinctly, “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 wo makes a one-off mistake. This is neither fair nor proportionate. It is good that HMRC have recognised this.”
HMRC stated that, instead of administering blanket penalties they will be able to, “concentrate more resources on more serious failures to comply, and to focus on educating employers about their filing obligations through targeted communications, webinars and Employer Bulletin articles”.
Let us all celebrate this victory for common sense!
