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HMRC has launched a campaign to offer higher rate taxpayers a time limited opportunity to pay up under their "Tax Return Initiative"
The initiative is aimed specifically at people liable to pay tax at rates of 40% and 50% who have been told to submit a self assessment tax return for 2009/10 or earlier and failed to do so, although the campaign is also available to anyone who has tax returns to submit for this period. This could include pensioners whose age related allowance has been reduced due to their income being above the income band.
Taxpayers have until 2 October 2012 to tell HMRC they want to take part, submit completed returns and pay the tax that they owe. Reduced penalties and improved terms are available for those who take part in the initiative. After 2 October, if the tax return has not been submitted, HMRC says it will use its powers to pursue outstanding returns and any unpaid tax. Penalties of up to 100% of the tax due and a criminal investigation could follow non payment.
HMRC tax campaigns launched so far against groups such as hospital consultants, home tutors, builders, plumbers and eBay traders have resulted in 23 criminal cases with a plumber recently sentenced to jail. They have yielded nearly £510 million from voluntary disclosures and over £120 million from non compliance follow up so it’s easy to see why HMRC is using this approach. Questions are being raised about whether this is fair as people who use the amnesty may be treated more leniently than those who have already filed late tax returns and have been charged interest and penalties.
Whatever your opinion, review your affairs and make sure that your tax returns are up to date now to avoid unnecessary interest and penalties.
Elizabeth Bainbridge is a Senior Tax Consultant at our Rosehill office in Carlisle.
Call 01228 690000 or email email@example.com
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