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HMRC Under Attack Over £100 Fines

One charity has attacked the HMRC automatic £100 fines for late tax returns, deeming them ‘nothing short of oppressive’. It urged them to consider overhauling the penalties that were given to almost one million people last year.

The Low Incomes Tax Reform group, who represent taxpayers that cannot afford legal advisers said that many people who had been fined had missed the deadline due to ill health, ignorance or bereavement. In addition, an official consultation from the charity which closed this week found that 200,000 people missed the deadline because they didn’t press the ‘submit’ button when filing online. They stated that the taxpayers who were fined were caused a very ‘significant amount of distress, fear and worry’ from the rapid escalation of penalties that could rise from £100 to £1,200 in six months.

HMRC announced plans in February to consider whether they would be able to differentiate between people who missed the deadline accidentally and those who missed it on purpose and whether alternative interventions were more ‘appropriate.’ They said:

“There are ‘reasonable excuse’ provisions that can remove penalties but the rules may need updating to better support those who genuinely want to comply.”

The £100 automatic fine has caused controversy since it was implemented in 2012, particularly as it applies even to people who owe no tax. It is estimated that a quarter of people who are required to fill in self assessments have no liability or owe less than £50.