Hidden away in the budget are new powers which mean taxpayers face massive increases in how much they can be fined simply for failing to understand their tax returns. The new penalty rules mean people who fill in their own tax forms face what is effectively a fine of up to 30% of any amount they understate which is then spotted by the taxman on grounds that they ‘failed to take reasonable care’. So for example, if they understate their tax by £1000 they face a payment of £1300. Until now penalties were rarely above 10%. Deliberate understatement of tax would now attracts a 70% fine. Unfortunately, yesterday’s press releases by Revenue & Customs ran to a record 270 pages, most of which are of interest only to accountants.
Posts Tagged ‘HMRC’
Budget 2008: Beware of the cost of tax form errors
Thursday, March 13th, 2008Taxman cracks down on landlords
Tuesday, February 26th, 2008Tax authorities are stepping up their efforts to uncover any buy-to-let investors that have failed to declare their rental income. Letters have been sent to landlords this week from HM Revenue & Customs (HMRC) requesting for clarification on their rental income. Landlords will have nowhere to hide as HM Revenue & Customs can search the Land Registry, stamp duty records and lettings website to find rented properties. Amateur buy-to-let investors are falling foul of the tax man because they need to declare their rental income even when a buy-to-let property has made a loss.
Harsh new powers to target tax dodgers
Sunday, January 20th, 2008A new legislation which came quietly into effect in December, gives HM Revenue & Customs (HMRC) additional powers of search, seizure and arrest for unpaid tax, as well as the ability to force banks, lawyers and accountants to hand over information in relation to perceived serious tax fraud. As the HMRC is currently advertising for Criminal Investigation Officers in London, Nottingham, Leeds, Manchester and Birmingham, it seems that these new powers will be put into use very soon. Last year, about 45,000 people with bank accounts in tax havens such as the Cayman Islands, Jersey and the Isle of Man coughed up by the November 26 deadline offer by HMRC. Under this partial amnesty they paid their overdue taxes and fines capped at 10%, rather than the usual penalty of between 30% and 100%, and the possibility of a criminal conviction. Those who have undisclosed taxes should seek financial advice or risk the possibility of hefty tax bills.
