HMRC plans 'penalty points' system for those who miss tax returns deadline

Former_MSE_Faye

The government's proposing new penalties for those who are late filing their tax returns or paying their tax bill...

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'HMRC plans 'penalty points' system for those who miss tax returns deadline'

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Pincher

Funny how the Personal Allowance is ~£10,000.

So they are saying if you have no tax to pay, no hurry.

If you do have taxable income, above the Personal Allowance, do it every three months, so they get their cut quicker. Might as well be on Pay As You Earn.

Reporting all the piddling 5% interest every three months will drive me insane.

Spidernick

I think HMRC's penalty system is pernicious enough as it is personally (whereby you can be fined up to £1,600 for a tax return with no liability). It looks like they want to make things more complex in the hope of raking in even more money from financial penalties and I hope it gets kicked into the long grass.

Castle

The £10,000 exemption refers to income, not profit.

gadgetmind

Woah, wait, what are we going to have to do quarterly?

I don't think I can face doing all of our CGT, dividend, interest, etc. calculations 4x a year each!

What do they need updating and why?

Pincher

If they use the PAYE model, so you pay proportional tax as the money comes in, even though you haven't reached the tax threshold, that will really take the biscuit.

If it doesn't bring in the tax revenue early, it's a serious waste of everybody's time.

gadgetmind

Hmmm, not until 2020, and we might be able to avoid having to do it.

However, as we've both had to do tax returns for 30+ years (even my wife during a 20 year work break!) I'm not optimistic.

badmemory

It should be interesting. I will have to pay tax on interest in the first 2 quarters and then they will have to refund it all in the next 2 quarters. Will they pay interest on the overpayment. I'm prepared to bet it will take longer to get the refund than they allow for receipt of the payment.

dori2o

This all stems from Osbournes budget a few years ago where he basically abolished the tax return form.

It was announced then that self assessment would change to a quaterly submission with a pay as you go feel to it rather than those who are self employed being able to pay their taxes 8 months after the end of the tax in which they are due for.

Personally I see no problem with this. Employed people are expected to pay tax at the point their income is received, why should the self employed be any different.

badmemory

Perhaps they should start taxing the state pension at source. Or they could change the way the K code works (or make a new one) so that it will take as much tax as required. Either move would take me out of self assessment and I would even start taking my private pension if they changed the K code & that way they would get more tax from me too!

Castle

dori2o wrote: »

Personally I see no problem with this. Employed people are expected to pay tax at the point their income is received, why should the self employed be any different.

Because the self employed are taxed on their profits not their income