Despite the rather tedious title used by HMRC, there is an important point to this campaign. HMRC are offering taxpayers the chance to bring their tax affairs up to date with favourable terms for those who have failed to file tax returns, provided the taxpayer signs up to this campaign.
Normally interest and penalties are levied in such cases and the maximum tax geared penalty is 100% of the tax ultimately due, or 200% of the tax ultimately due in the case of offshore issues (this applies for 2011/12). Higher penalties are generally due when there is a lack of openness and willingness to work with HMRC to determine the correct amount of tax due on an individual’s income or gains. However, if a taxpayer signs up for this campaign, then penalties can be mitigated to reflect the fact that the taxpayer has come forward voluntarily.
Formal notification to HMRC is required before 15 October 2013 with regards to outstanding tax returns for 2011/12 and earlier years, and once the returns are filed the taxpayer is required to pay the full amount of any income tax and/or National Insurance Contributions due, but it is possible to make arrangements with HMRC for additional time to pay these liabilities. Depending upon circumstances, there may even be tax refunds due!
If a taxpayer continues to ignore their fiscal responsibilities, HMRC have the powers to seek payment of amounts that they “determine” are due (often with little resemblance to “actual” income) and the taxpayer will be pursued through the Courts for payment, and HMRC even go as far as considering a criminal investigation, if appropriate.
If you would like to know more about this campaign and would like help with the completion of outstanding tax returns, then please contact us: email@example.com