The new, tougher penalty system was launched last year and will be in place again this year, catching many people unawares.
According to accountancy firm UHY Hacker Young, HMRC has already earned hundreds of millions of pounds more from the stricter penalties than they have in previous years.
Mark Giddens, head of private client services at the firm, said: “The new penalty system means fines for taxpayers late in submitting forms even when they have no tax to pay, which will come as a shock to those receiving unexpected penalties.”
The icing on the cake is that even taxpayers who are owed money by HMRC will be fined for not filing their tax return on time.
Being just one day late will cost tax payers £100. The fine will continue to increase if the return is three, six, or 12 months late.
Very late entries can accumulate up to £1,600 of charges.
Mr Giddens advises people not to panic at this stage, as panic leads to mistakes (which can also result in hefty fines). Simply ensure all income and gains are recorded and simple mistakes haven’t been made, like mixing up ‘net’ and ‘gross’ figures.
One way to safeguard against HMRC fines is to enlist the help of an accountant. To find out more about how accountants work, please visit our Tax page.
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