HMRC consults on further simplification of penaltiesThursday, February 3rd, 2011
Since 2007, HMRC has introduced new penalty structures for common offences across the different tax and duty regimes. Those that impact on the taxes involved in payroll are:
- penalties for inaccuracies in returns
- penalties for late filing
- penalties for late payment.
There are however, countless (actually over 300) other “regulatory” penalties that apply to specific compliance failures within the various tax regimes. There are still, for example, some 75 separately-defined penalties that apply to income tax, although about two-thirds of those are defined in exactly the same way.
On 31 January, HMRC published a discussion document entitled The Simplification of Regulatory Penalties, which looks at these many other penalties and seeks views on the potential for simplification and alignment. Options considered include changing discretionary penalties into fixed penalties, simply scrapping those that are redundant, and introducing one single regime with a minimum-maximum penalty range, but including a provision to increase the penalty where the financial advantage gained by the breach is more than the maximum.
The deadline for responses is 11 March 2011.