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<p>HMRC issues SA tax returns to customers when the information they hold suggests
that the customer meets the published criteria for completing one. HMRC often cannot
determine someone’s tax liability until they have sent in a tax return, therefore
they need the return to establish whether there is tax due or not. Late filing and
payment penalties are charged to encourage customers to file on time but we can cancel
a customer’s late filing penalty if they have a reasonable excuse. Customers can also
ask HMRC to remove them from the SA process for future years if they no longer meet
the criteria.</p><p> </p><p>From October 2011 the penalty legislation changed, from
this point the capping of penalties was no longer factored into the calculation and
any fixed penalty applied remained at the full amount regardless of liability.</p><p>
</p><p>Although no change to the current penalty regime has been announced, Penalty
Reform within Making Tax Digital will change the way we calculate penalties for late
Submission and late payment of tax. The new legislation will factor in the Liability
amount, Filing frequency and length of time outstanding within its penalty calculations.</p><p>
</p><p>In reforming late payment and late filing penalties HMRC’s aim is to encourage
those who persistently default to comply with their tax obligations rather than penalise
those who make occasional errors.</p>
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