The Government is reforming sanctions for late submission and late payment “to make them fairer and more consistent across taxes”. The changes will initially apply to VAT and Income Tax Self Assessment (ITSA). As part of this reform, interest charges and repayment interest will be harmonised to bring VAT in line with other tax regimes, including ITSA. The changes will apply to:
- VAT taxpayers for accounting periods beginning on or after 1 January 2023,
- to ITSA customers with business or property income over £10,000 per year (who are mandated for Making Tax Digital (MTD) for ITSA) from the tax year beginning 6 April 2024, and
- for all other ITSA customers from the tax year beginning 6 April 2025.
This extra time, HMRC says, will enable the Revenue to ensure the IT changes necessary for the new penalties and interest charges can be introduced as effectively as possible, ensuring a high standard of service to customers.
The new regime will be a points-based system and will operate in a similar way to motoring penalties in that the points will elapse after a period of time depending on the regularity of the returns.
For details see: Penalties for late submission – GOV.UK
It is recommended that you authorise a tax specialist to handle your tax affairs and deal with HMRC on your behalf. This will ensure that all deadlines are met and that you are not paying more tax than you need to.
Our diverse team of tax professionals within the Beavis Morgan group are committed to ensuring that your tax reporting obligations are fully satisfied and that every opportunity to maximise tax savings is made known to you, and by restructuring your affairs in a tax effective and efficient way.
If you have any concerns relating to your tax return or wish to discuss your tax affairs in further detail, please contact Mariske Byrnes or your usual BM Connect adviser.
