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HMRC is rolling out New ‘penalty points’ system this month may cause forgetfulness taxpayer and fined £200.
New system. As part of the tax digitization plan, the tax authority proposed in 2024 that it will first be tested on about 100 taxpayers.
Under current rules, people who missed January 31 Self-evaluation submission deadline Automatically receive a £100 fine. This can be increased by £900 (£10 per day) after three months and a further £300 after six months.
The new system will require many self-employed workers to submit quarterly updates before issuing a “final statement” at the end of the year, replacing the current self-assessment Tax return.
Each late quarterly submission will be awarded 1 point, and instead of an automatic penalty, 4 points (or 4 missed quarterly deadlines) will result in a £200 penalty.
At the same time, one point is also deducted for each late submission of an annual report, but the threshold is lower at two points (or missing the annual deadline twice), which also results in a £200 fine.
While the system will only affect a small number of people at first, it will be fully rolled out for sole proprietors and sole proprietors from April. landlord Annual self-employment and property income exceeding £50,000. The threshold will be lowered each year, to £30,000 in 2027 and £20,000 in 2028.
The quarterly penalty system will not apply during the first year of the program to give traders time to adapt.
HMRC A document on the changes explains: “The new penalty system is simpler and fairer than the previous system. The new system will punish those who consistently fail to comply by missing submission and payment deadlines, while being more lenient on those who occasionally fail to meet their obligations.”
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A HMRC spokesperson told Sky News: “We are committed to helping customers get their tax rights to avoid penalties. Our fairer penalty points system for late returns means that only Making Tax Digital customers who consistently miss deadlines will be financially penalized.”
HMRC revealed 3.3 million people were still yet to submit their self-assessment tax returns last week, with just a week left before the January 31 deadline.