HMRC Penalties
Figures secured by UHY Hacker Young have shown that there has been a 25% increase in the amount raised by HMRC from tax penalties in 2022/23, hitting a record £851 million. This figure is up from £681 million in 2021/2022, when investigations were stalled due to the pandemic.
Analysis shows that most of the businesses affected by fines were already experiencing issues with their finances and struggling to pay on time. However, some were down to errors in paperwork.
If you are the subject of a fine from HMRC, it might be worth looking into it first, as some fines are withdrawn when challenged.
It’s also worth remembering that, in January 2023, HMRC introduced a new ‘penalty point’ regime for the late submission of VAT returns and the late payment of VAT. The way interest is charged also changed.
You must send a VAT return by the deadline for your accounting period; typically, this is quarterly. Late submission penalties work on a points-based system. For each return you submit late you will receive a penalty point. Once you’ve reached a penalty point threshold, you’ll receive a £200 penalty and a further £200 penalty for each subsequent late submission, while you’re at the threshold.
This new regime replaced the current default surcharges imposed by HMRC on VAT and are, broadly speaking, less punitive than the previous regime.
If you’re worried about keeping up with tax and VAT payments or are overwhelmed with the paperwork involved, please do give us a call: 01892 513515.