Meeting the obligations to file returns and pay tax on time

Tax penalties can affect anyone who pays tax, has to make a tax return of any sort or is simply called on to provide information to HMRC. Following a consultation which ended on 11 September, any announcements in this area have the potential to affect every UK taxpayer.

HMRC aims to "influence behaviour" by creating a statutory framework of penalties for late payment or return filing, with an emphasis on repeat offenders.

For taxpayers, the concern is that the penalty system should be fair, proportionate and consistently applied.

A rigid system of fixed penalties risks introducing a "speed camera" approach to tax compliance. We would like to see:

a) HMRC retaining discretion to withhold fixed penalties in cases where they are not merited; and
b) the taxpayer retaining the right of appeal against any penalty or HMRC decision, including refusal to withdraw a penalty.