HMRC is changing the way it calculates tax penalties. These changes will initially apply just to VAT and Income Tax self-assessment. HMRC say this will make things fairer and more consistent ...
Tax penalties will soon be based on a points system!
For those who pay VAT, it changes on periods starting on or after the 1st of April 2022. For self-assessment, it will start after the 6th of April 2023 if your income is above £10,000 per year. For all other self-assessment taxpayers, it'll be in 2024.
"There will be new late submission penalties!
Although taxpayers will no longer receive a penalty if they fail to meet certain deadlines. Instead, they will incur points for missed obligations, and when those points hit a threshold, a penalty is applied. This should only penalise a small majority who deliberately miss deadlines rather than those who make a genuine mistake.
After the points threshold is reached, a £200 penalty is applied, and there will be different points totals for each type of submission they are obliged to make. So, a self-assessment tax return has separate points from a VAT return.
"Points will expire either over time or after a fixed period of compliance!"
You can discover more about this new points system on the HMRC website, and it will also give you further information on the different thresholds for the different kinds of submissions, penalties and commencement dates.
Until next time ...
HELEN BEAUMONT
Would you like to know more?
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Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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