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Today’s Top Headlines

IoM Announces New Penalties For Incorrect Tax Returns

by Jason Gorringe,, London

28 March 2016

The Isle of Man is to introduce new penalties for tax return errors from October 6, 2016.

The changes to Manx penalties were announced in an update to Guidance Note 34, Incorrect Tax Returns, which was released on March 21, 2016.

Currently, a taxpayer who voluntarily discloses tax irregularities that affect a number of years can have their penalty reduced to zero subject to a number of conditions. From October 6, the Assessor of Income Tax will begin to charge penalties in such cases, except for simple, voluntarily disclosed errors.

In addition, limits on the amount that a penalty can be reduced in most other cases have been removed.

Where the return is incorrect as a result of the taxpayer's neglect, the maximum penalty is 100 percent of the additional tax due. Where the return is incorrect as a result of the taxpayer's fraud, the maximum penalty is 200 percent of the additional tax due. Additionally, in both instances, the taxpayer is charged interest from the date on which the tax should have been paid, had a correct return been made at the correct time.

TAGS: Isle of Man | compliance | tax | tax compliance | interest | penalties | Tax

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