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New SA settlement deal offered to taxpayers

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11th Jul 2013
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HMRC has launched a new voluntary campaign for individual taxpayers to settle their tax bills if they failed to complete a self assessment tax return up to 2011/12.

The settlement window opened this week and participants have until 15 October to complete and submit a tax return, and pay the tax and National Insurance Contributions (NICs) that they owe.

Those that come forward under this campaign will benefit from a reduced penalty of 10%.

Thereafter penalties will jump up to between 30% and 100% of the tax due, with an additional risk of criminal investigation.

In the coming weeks HMRC will also be writing directly to several thousand people it has identified using the Connect intelligence-gathering software and will follow up with calls.

HMRC said that a tax return could be required where someone had another source of income or investments for a specific year, or maybe rented out a property, which would mean that income would need to be declared to HMRC through a SA tax return.

Marian Wilson, HMRC’s head of campaigns, said: “This is definitely the best time to catch up, on the best possible terms. While some penalties will apply, it is likely to cost people more if we have to find them rather than them coming to us. We have made it easy to take part.

“We know this approach works because campaigns launched so far have produced more than £547m by people coming forward voluntarily.”

While the Revenue is keen to get the settlement window message across, it was less clear about who is being targeted and exactly how many letters will be sent out.

The list of “several thousand” includes people who have already received notices to file, who hardly need to be identified with sophisticated risk analysis software. But longer-term delinquents are also at risk, an HMRC spokesperson told AccountingWEB: “For individuals with whom we do not initially communicate directly we will continue using Connect through the course of the campaign. And we may contact individuals with an outstanding return at any time where we identify gaps in return history and consider there is a level of risk presented.”

Under the new My Tax Return Catch Up campaign, anyone coming forward will submit their return, pay any tax due, interest and a penalty - which is typically around 10% of the tax due, HMRC confirmed.

Late filers for 2011-12 currently are into daily penalties at the moment, which could go up to a maximum of £900 on top of the initial £100 late filing penalty. If they still haven't filed by the beginning of August, another £300 will be slapped on top of the bill (or 5% of the tax owed, whichever is higher). This will go up another 5% or £300 in January 2014. If they don’t come forward as part of the current campaign, HMRC could cite this failure to come forward as proof of a deliberate attempt to conceal information if and when it comes after them, Rebecca Benneyworth warned.

The campaign follows last year’s Tax Return Initiative campaign, which covered higher-rate taxpayers who had failed to submit 2008/09 or 2009/10 returns.

During that campaign more than £30m was paid when more than 3,000 people voluntarily came forward filing more than 5,500 tax returns.

According to the Revenue campaigns have so far raised £547m from voluntary disclosures, and nearly £140m from follow-up activity, including 20,000 completed investigations.

As a result of HMRC’s recent campaigns there are 13 criminal investigations underway, with five convictions already secured.

Help is available from HMRC online and through a dedicated helpline on 0845 601 8818.

Replies (10)

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By school63
13th Jul 2013 22:50

How does this reconcile with the article i read about HMRC losing the appeal on the daily penalties

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By jessica_arora
15th Jul 2013 13:57

fixed penalties?

So if someone files there 2011/2012 tax return under my tax return catch up scheme - does that mean hmrc wont charge them fixed penalties ..? so only penalty under the scheme charged will be 10% of tax due? if that's the case its a great campaign for late filers to submit there returns

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By david5541
15th Jul 2013 14:13

this ridiculously pecuniary penalty rule

 

this ridiculously pecuniary penalty rule  was thrust on an overseas client of mine for 10/11  with daily and three monthly penalties being wacked on totalling 1200 when the liability was nil!....

 

of course my reasonable appeal was rejected -maybe i should have been alot more unreasonable with the department!!!!! 

 

 

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By The Black Knight
15th Jul 2013 14:52

Heard it all before

getting a bit tired this....own up if you want when you want and we will have a 10% scheme that will fit. If you don't bother we won't either.

Only 3 plumbers (the criminally stupid) have been caught and everyone knows a cash in hand no vat plumber that hasn't been caught. Very low odds that you can take to the bank.

How HMRC miss whole house loads of unpaid tax is a giggle.

HMRC must have information on fifty years worth of cases they haven't acted on and are unlikely to do so if past performance is anything to go by.

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By The Black Knight
15th Jul 2013 15:06

when does

When does a late return become a deliberate attempt at evasion?

I have also noticed that you can go 7 or 8 years without filing a return. No determinations will be issued and the penalties just sit on the statement of account with no collection proceedings.

I have also seen them refund amounts from later years and not required the penalties or the tax from the earlier years! Guess that's computers for you.

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By mabzden
15th Jul 2013 15:32

In Writing?

Has HMRC said categorically, in writing, that penalties will be 10%? I can't see anything on their website to confirm this - in fact they avoid giving any figures.

I've been involved in "campaigns" before where HMRC says one thing at the start and this is conveniently denied and/or ignored by the tax inspectors handling the cases later on. So beware about recommending anything to your clients based on uncredited quotes in a newstory.

I won't be mentioning the 10% figure until I've seen written confirmation on HMRC's website and details of any conditions or caveats. And, knowing how HMRC operates, I very much doubt this will happen.

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By wannabay
17th Jul 2013 12:23

penalties

the guidance notes under the 'what's in it for me' heading confirm that the fixed penalties remain but that the behavioural penalties are likely to be avoided, so there's not much incentive

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By jessica_arora
18th Jul 2013 14:06

Has anyone submitted overdue tax return under this campaign yet for there clients?

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By mabzden
18th Jul 2013 14:33

The only thing  can I can see

The only thing  can I can see in the "What's in it for me" section about penalties is "increase your chances of saving a higher penalty based on behaviour". So it sounds as if HMRC's normal penalty regime applies, although you'll get a bit of credit for cooperating.

 

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By wannabay
19th Jul 2013 14:40

penalties

you need to click on the guidance note link at the end of that section, then look at the appendix, extract below

HMRC can charge higher penalties depending on behaviour. These can be as much as 100% of the tax and NIC’s due. By taking part in the campaign you will receive the best terms on offer and we expect that most will not have to pay these penalties. It is always better to come to come to us before we come to you. Some late filing penalties will remain due, as well as the tax owed, and any interest, surcharges and penalties for late payment.

 

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