HM Revenue & Customs said that it will no longer fine people £100 for not completing their income tax returns on time. It said that its penalties were a bit rigid and will be ending fines for those who miss the deadline by a day or two.
A HMRC spokesman said:
“Prior to February 2012, this penalty was cancelled if no tax was owed. But from February 2012, the penalty applied irrespective of whether there was an outstanding amount.”
“Following this change, the proportion of on-time filing improved significantly, but it means some customers receive a penalty where there is no tax at risk.”
The consultation document suggested that scrapping the automatic fines is a fairer system.
The government said that instead of fines there could be high interest rates added to debts could, a means of encouraging people them to pay sooner. It also mentioned the introduction of a system ‘similar to penalty points for motoring offences’.
The HMRC document stated:
“We know that the vast majority of customers meet their obligations in full and on time, and that penalties are only applied to a small minority of people and businesses.”
“We want to make sure our approach works as well as possible.”
“This is why we want to consider whether we could better differentiate between deliberate and persistent non-compliers and those who might make an occasional error for whom alternative interventions are more appropriate.”