Late payment penalties and interest harmonisation

HMRC has updated its tax information and impact note which explains the FA 2021 reforms to the penalty regime for late submission of tax information, late payment of tax and HMRC interest harmonisation.

The ‘late payment’ and ‘impact on individuals, households and families’ sections have been updated to clarify how the late payment ‘first penalty’ works, noting that the initial 2% charge is based on the amount of tax outstanding at day 15, with a further 2% charged on the outstanding amount at day 30. Previously, the guidance described the penalty at 30 days as being ‘set at 4% of the outstanding amount’.