Tax Geared Penalties
Last year HMRC imposed a significant number of penalties on taxpayers for failing to get their tax returns correct. The most serious type of penalty is for ‘deliberate errors’ and the fine for this is between 20% to 100% of the tax underpaid. The other type of tax error is a ‘careless error’ and here the penalty is between 0% to 30%. You can reduce the penalty you might get by notifying HMRC before they start an enquiry into your tax return and this is called an ‘unprompted disclosure’. A penalty can also be reduced by helping HMRC work out the extra tax due and by allowing them access to the information they request. However, you should only give them access to the information that is relevant.
Over the years we have helped many people who have come to us where they have failed to notify HMRC of a source of income and also close down investigations quickly by working with the client and HMRC to minimise any penalty. In certain circumstances we have also been able to suspend an agreed penalty (for up to two years) and assuming no faults in this period then the penalty is cancelled.
If you find yourself in with a problem like the above then give us a call to discuss your options.