HMRC are considering even more changes to their penalty system. As they revamp to accommodate more digital services, the department is now pondering the way penalties are issued, so that they get things right the first time!

This is the subject of ‘HMRC Penalties: a Discussion Document’ that runs from 2nd February – 11th May 2015.

Penalties are currently applied when people fail to meet their tax or entitlement obligations, HMRC insist that the penalties are in place to maintain compliance and not to raise revenue. They are now considering how best to differentiate between those who make genuine and occasional errors and those deliberate and persistent non-compliers. They have promised an ‘efficient and impartial’ tax and payments authority.

In an ever increasing digital world, taxpayers and professionals have criticised HMRC’s practices, which has led the department to re-think the way in which they apply penalties.

They have promised their new digital services will:

  • be easy to use, convenient and personalised for individuals, businesses and agents
  • promote digital take-up and voluntary compliance by designing for customer needs
  • use data to help customers avoid errors through pre-population
  • provide assistance in using or accessing our services for those who need it
  • allow us to consult our customers on policy proposals and changes so that we can improve them

As they change the way they operate, they need to change the way in which they apply penalties – but is this too little too late for the Revenue?

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