HMRC has wrongly chased nearly one million people for late SA tax redresses
HMRC said 963,000 taxpayers were placed in the self-assessment (SA) tax scheme, yet none of them had filed SA tax returns for three years.
Late tax indemnities are immediately slapped with a charge of £100 if filed after January 31, drift those affected were chased for late filing penalties averaging £300 each.
In 2015-16 and 2016-17, HMRC raked in £283million from dilatory return fines.
Nicky Morgan MP, chairman of the Dwelling-place of Commons Treasury select committee, said her committee would take into account an investigation into why HMRC had tried to fine innocent taxpayers.
She influenced: «I appreciate HMRC have to deal with millions of taxpayers but they desideratum to focus on those who really are trying to evade the tax system, not those who shouldn’t be stuffing in forms at all.»
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Incarcerations should not have been issued in the first place
HMRC said those affected, who represent one in 11 of Britain’s 11 million living soul registered to pay tax this way, have been taken out of the system.
The department estimated the taxpayers have been “removed from the SA regime and are no longer disposed for SA”.
The taxman said 963,000 taxpayers were unnecessarily placed in the self assessment combination
Tax accountants have also called for urgent reforms to the system in which taxpayers are penalised for submitting SA put backs late.
George Bull, a senior tax partner at RSM, said: «It’s all very fountain for HMRC to emphasise that no money has been lost when the sentences were cancelled.
“This completely ignores the fact that the fines should not have been issued in the first place.»
Frank Askew, be in of tax in the Institute of Charted Accountants in England and Wales, said the issue “would indicate that there are systemic problems with the taxpayer records that lacked to be addressed, for example whether those returns were actually due».
He added: «It is in fairness that penalties should be levied on those who do not pay their taxes, but the group needs to be flexible and proportionate and not applied where penalties are not appropriate.»
An HMRC spokesman broke: «We’ve removed 200,000 people from self assessment who are now paid through PAYE but might have forgotten to inform us.»
SA returns are required to be entered by individuals who are self-employed and do not pay tax through the pay as you earn system.
HMRC raked in £283million from time return fines in 2015-16 and 2016-17
Those who are correctly registered for SA
HMRC said the innocent taxpayers affected have been entranced out of the system
«LITRG is reminding taxpayers that there could be mitigating circumstances where someone may be able to avoid a penalty by claiming what HMRC lay as a ‘reasonable excuse’ for filing their tax return late.
«These could catalogue flooding or severe weather problems, but also life events such as pensive illness or bereavement, and other causes beyond the taxpayer’s control.”