UK's HMRC To Make Life Easier For Late Filers

BY Jason Gorringe, Tax-News.com, London

06 October 2008

Her Majesty's Revenue and Customs (HMRC) announced on Monday that they are making life easier for late filers of paper-based tax returns.

This news will potentially benefit those unable to file online after the October 31 deadline for paper filing and who thus have to send in a late paper tax return.

Instead of being landed with an automatic late filing penalty, where they have a 'reasonable excuse' for being late with their returns (perhaps because of a software failure), taxpayers or their tax advisers can submit a 'reasonable excuse claim' with their tax return.

Until now, the taxpayer could only claim a reasonable excuse after HMRC issued a late filing penalty. The advance claim procedure will enable HMRC to suppress many penalty notices and save time. The Chartered Institute Of Taxation (CIOT) has welcomed the change.

Upon hearing the announcement, Tina Riches, a technical director for the CIOT remarked:

“The CIOT have worked with HMRC to ensure a smooth process for tax advisers, the taxpayer and HMRC. We are very pleased that they have taken the time to consult with the professional bodies and understood the problems in this transitional year. The outcome is a positive result for all concerned.”

Individuals can avoid late filing penalties by paying their tax on time.

However, without a valid claim for reasonable excuse, late partnership tax returns and returns of individuals who have not paid all their tax on time can attract a penalty of up to GBP100 per partner or individual.

The one-page form will, if HMRC accepts it, mean that no penalty notice is issued.

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