HM Revenue & Customs (HMRC) is facing calls to clarify its penalty policy ahead of the upcoming self-assessment tax return deadline of 31 January.<\/p>\n
The calls come after HMRC amended its penalty factsheets in December, much to the confusion of visitors to the tax authority\u2019s website.<\/p>\n
New wording on its factsheets suggests that taxpayers who \u2018voluntarily disclose\u2019 that they have made an error in their tax return could potentially incur a 10 per cent penalty.<\/p>\n
Previously, such disclosures would not attract a penalty of any kind.<\/p>\n
However, the new wording appears to suggest that anyone who takes \u201ca significant period\u201d to spot an error on their return \u2013 and to inform HMRC of this error \u2013 will be handed a penalty.<\/p>\n
The Revenue\u2019s new, amended factsheet reads: \u201cIf you have taken a significant period (normally three years) to correct or disclose the inaccuracy we will normally restrict the amount of reduction given for disclosure.<\/p>\n
\u201cWe will restrict the penalty range by 10 percentage points above the minimum to reflect the time taken before working out the reductions for telling, helping and giving,\u201d it adds.<\/p>\n
Reports suggest that HMRC has not been very clear in communicating the change \u2013 and concerns have been raised that the new wording may encourage individuals to avoid making disclosures.<\/p>\n
As a result of this, tax bodies and professionals are calling on the Revenue to clarify why the change has been made \u2013 and whether such penalties will still apply in instances where a taxpayer has taken \u201creasonable care\u201d with their return, yet still made an error.<\/p>\n
HMRC has been urged to provide comment, but at this stage, none has been given.<\/p>\n
In the meantime, taxpayers are being urged to be on high-alert when completing their tax returns and to ensure that all crucial information is checked and verified by an accountant.<\/p>\n","protected":false},"excerpt":{"rendered":"
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