Earlier this month, HMRC confirmed they will show leniency against people who filed their 2013/14 Self Assessment tax return late.
As opposed to carrying out a full investigation into anyone that appealed for their late filing penalty to be waivered, they will accept “reasonable” excuses. Here is the list of what HMRC consider a “reasonable” excuse to be and what is unlikely to fulfil this.
This means up to around 890,000 people who have been given penalties for SA tax returns will be given an amnesty, saving around £89m in total as the late filing fine stands at £100.
The reason for this action, as stated by a HMRC spokesperson, is so that HMRC may concentrate harder on investigating major tax avoidance and evasion instead.
This suggests time-consuming jobs, such as investigations into late filing penalty fines which are effort and resource consuming and divert HMRC staff attention, are being put on the back burner while they deal with their huge backlog of almost one million letters.
Though this may seem like good news for late 2013/14 tax payers, it bodes to cause animosity between those who made the effort to file their SA tax return on time and those who missed the deadline.
People who do not have a “reasonable” excuse may get away with it by simply looking at the list of what is acceptable and picking one, which isn’t fair on those who tried hard to organise themselves.
Furthermore, it could mean that next year everyone and anyone will be appealing with an excuse to try to get their late filing penalties written off. Only 2016 will tell whether this move by the HMRC will make the lives of their staff and those of the UK taxpayer simpler or more complicated.