HMRC Points-Based System for Late Tax Return Submissions

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HMRC Plans a New Penalty System for Late Tax Returns

Last updated on Wednesday, December 6, 2017

Written by Alex Cadman

HMRC is planning to implement a points-based system for those that are late filing their self-assessments (Personal Tax Returns) and other taxes such as VAT Returns. Currently the penalty for late Personal Tax Returns is £100 instantly for filing late up to three months past the 31st January deadline.

Announced in the Autumn Budget 2017, the government said it would reform the current penalty system for late or absent tax returns, such as Personal Tax Returns. It will introduce a points-based approach similar to that of the driving licence points system.

The system would see late penalties being issued to taxpayers who accrue a certain number of points for late or missing submissions. 

A consultation will follow to work out the logistics and to give the government a chance to make changes, approve the plans and provide enough time to implement the system for the next Tax Return deadline.

The points system would also apply to VAT Returns, and it’s anticipated that it will first be introduced to VAT reporting in 2019 before a rollout to income tax reporting occurs.

The government wants to improve fairness, specifically for Personal Tax Return late submission penalties, as some taxpayers have genuine reasons to miss the 31st January online deadline, or 31st October paper Return deadline, while others may either be careless or purposely avoiding paying their tax bill.

The points system will aim to differentiate between these parties and give taxpayers a chance to redeem themselves by wiping the slate clean to zero points after a certain period of compliance has passed.

Last January, 840,000 people missed the 31st January online deadline for filing their Personal Tax Return. This equates to £84,000,000 in automatic late penalties issued by HMRC.

Of course, you may appeal against a late penalty if you have a reasonable excuse, but reasons such as ‘forgetting’ or ‘someone else was supposed to do it for me and didn’t’ will not be accepted. One excuse that is viable is problems occurring with HMRC’s own systems at deadline time – such as the crash of HMRC’s online and telephone helplines that occurred on 5th December.

HMRC might issue you with additional penalties if your Personal Tax Return is filed, and your tax bill paid, more than three months after the deadline.

Remember, your Personal Tax Return is your individual responsibility and you must ensure it is completed fully and submitted to HMRC online by 31st January.

An accountancy firm that’s experienced in handling Personal Tax Returns can help you avoid confusion and stressing about deadlines by completing and submitting your Tax Return to HMRC online on your behalf.

Churchill Knight & Associates Ltd, having completed over 20,000 Personal Tax Returns over 20 years, can also complete your Return swiftly and accurately, and even inform you how much tax you owe or any refunds that you may be owed.

We’ll then submit your Return, upon your approval, to HMRC for you ahead of the deadline. This is an all-inclusive service and you can receive a discount of 10% until 31st December. Contact us on 01707 871622 to hire Churchill Knight’s Personal Tax Team, or enquire online.

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