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HM Revenue and Customs (HMRC) incorrectly fined 963,000 self-assessors – three times in a row – for issuing late tax returns, as reported by the Sunday Telegraph.

Nearly one million taxpayers were chased to pay fines by HMRC inspectors even though they didn’t need to file self-assessment (SA) returns. HMRC have now removed these people from the register.

The Sunday Telegraph found that the people affected “represents one in 11 of the UK’s 11 million people who are registered to pay tax in this way every year.”

The self-employed typically pay tax through this method, rather than using the PAYE system which automatically deducts tax and national insurance by the employer.

MP’s under the leadership of Nicky Morgan, the newly elected chairman of the Treasury Select Committee, are to consider whether to look into why HMRC issued fines to taxpayers, even after three years of not filing a self-assessment tax return.

Morgan told the Sunday Telegraph, “I know as a constituency MP just how stressful people find it being penalised by HMRC for something they don’t owe.”

“I appreciate HMRC have to deal with millions of taxpayers but they need to focus on those who really are trying to evade the tax system not those who shouldn’t be filling in forms at all.”

Taxpayers were typically charged a total of £300 each as there is an automatic penalty of £100 for missing one tax return deadline by three months.

What’s a self-assessment tax return?

Self-Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.

Even if you’re employed, but you are earning self-employed income on the side, you will be required to file a self-assessment tax return.

At Gorilla Accounting, as part of our all-inclusive accountancy package, we will register you for self-assessment and prepare your self-assessment tax return.

For more information, get in touch by calling 0330 024 0406 or email