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 ‘NI’
Budget 2008: Beware of the cost of tax form errors
Thursday, March 13th, 2008Budget 2008: NI stealth tax for those earning £40,000
Thursday, March 13th, 2008While it was buried in yesterday’s Budget details, the earnings ceiling for NI has been raised by £100 to £770 a week. Analysts say this means workers earning around £40,000 will pay £520 extra a year and will be among the big losers from the Budget. The change to the NI cap will be worth almost £2bn a year in revenues to the Treasury. Critics say the rise in NI bills, combined with the lack of concessions on other taxes that fall hardest on the capital - such as residential-property stamp duty, higher council tax bills, road tax, increased duty on alcohol etc - meant Londoners would be providing an even higher proportion of the national tax from April. As there are more people in London earning over £40,000 a year, they would be hit the hardest by this hidden tax.
