ACCA urges HMRC to speed up issuance of penalty notices

Accountants in London will probably be relieved to hear that Chas Roy-Chowdhury has joined in the call for HMRC to speed up the issuance of penalty notices.

The ACCA’s head of taxation says the Revenue should issue prompt penalty notices when a deadline is missed. He claimed that there has been a level of inconsistency in recent tribunal decisions over the late filing of PAYE returns that would not have occurred if the notices were sent out in a timelier manner.

He went on to say that HMRC should show more understanding towards companies that make honest mistakes when they submit their P35 income tax and NI contributions return at the end of the year.

Furthermore, Mr Roy-Chowdhury says the Revenue should reduce penalties in order to encourage people to file their late returns quickly. He explained that HMRC could set a penalty of £500 for filing a P35 late, but say the fine will be reduced to just £100 if filing occurs within 30 days.

Once real time information comes into being in April 2013, it should be easier for the Revenue to keep on top of reminders and penalties. Employers will then start reporting income tax and NI deductions as they are made, rather than at the end of the tax year.

HMRC is currently preparing to challenge a recent tribunal ruling criticising the practice of late issuance of penalty notices.

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