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Self-assessment penalties rising

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HMRC issued penalties for late payment of self-assessment bills to 331,000 individuals for the 2016/17 tax year, an increase of 14% over the previous year.

According to accountancy firm Moore Stephens, this rise in the number of penalties is due in part to the record number of people completing self-assessment returns, many of whom are self-employed. Figures from the Office for National Statistics show the number of self-employed individuals in the UK reached a record high of 4.93m in March 2019.

Tim Woodgates, tax specialist at Moore Stephens, commented: ‘The pool of people at risk of being fined for late payment is now bigger than ever as self-employment continues to grow’.

‘UK taxpayers are feeling the pinch. As a result, some do not have the money to pay the tax bill on time, even though they want to’, Woodgates added.

Moore Stephens notes that 233,000 late payment penalties have been raised for the 2017/18 tax year so far, since the payment deadline of 31 January 2019, with more to follow.

HMRC cancelled just 14% of all the self-assessment late payment of penalties on appeal last year, showing a fall from 16% and 18% cancelled in the previous two years. Moore Stephens suggests HMRC is becoming less sympathetic to taxpayers who appeal against late payment penalties and may be narrowing the grounds for what it considers to be a ‘reasonable excuse’.

Issue: 1451
Categories: News