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Where Taxpayers and Advisers Meet
Late Tax Return Fines – or Unexpected Brexit Consequence 1138
26/02/2019, by RSM UK, Tax News - General
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RSM UK's Sarah Saunders considers HMRC's admission that it may not issue 2017/18 tax return late filing penalties until late April 2019

HMRC usually issues £100 fines for late tax returns in early February to remind taxpayers who have not yet done their returns, and hopefully encourage them to finally comply.

In our experience these fines usually focus the attention and trigger responses well before the next fine date at the end of April when £10 per day penalties start (potentially mounting up to £900 in total).

This year however, HMRC has announced that the 2017/18 tax return fines may not go out until late April 2019, just before the daily fines start. If somebody is genuinely unaware they need to submit a tax return their window for correcting this before the fines become aggressive will be radically reduced.

A cynic might suspect that this was part of the stated HMRC aim of collecting the maximum revenues, by triggering an exciting selection of extra fines. However, this appears not to be the case, although it may be the result.

On announcing this HMRC also gave the reason which, as appears likely to be the case for so many problems, is Brexit! It is anticipated that exiting the EU will lead to an increase in calls to HMRC for guidance, leaving them with too few resources to deal with the usual wave of late tax return queries that happen when the fines go out.

The penalties will be charged as usual, but people will have much less chance to realise they are in trouble and correct things before it gets expensive. Given the well-reported difficulty of contacting HMRC by phone at the best of times, one can sympathise with the argument, but it will be little comfort for accidental defaulters suddenly facing unexpected fines with minimal warning.

One wonders what other vital HMRC contact and services will end up curtailed to manage Brexit. Or will it simply be the universal get out clause for poor service this year?

About The Author

RSM is a leading audit, tax and consulting firm to the middle market with nearly 3,500 partners and staff operating from 35 locations throughout the UK. For the year ending 31 March 2017, RSM generated revenues of £319m. RSM UK is a member firm of RSM International - the sixth largest network of audit, tax and consulting firms globally. The network spans over 120 countries, 813 offices and more than 43,000 people, with a fee income of more than $5bn.

(W) www.rsmuk.com

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