Under the current system there is a set penalty of £100 for missing the filing deadline and a 5 per cent penalty of tax due or set amounts (5 per cent or £300 if greater at 12 months). Under the new proposals 4 per cent would be charged for tax returns filed 30 days late, 10 per cent after six months and 15 per cent after a year.
The potential move is part of plans that will require companies and the self-employed who have an income of more than £10,000 to submit tax returns online every three months, instead of annually. The change, which is due to come into force in 2019, would include income tax, VAT, national insurance and corporation tax.
But Rob, 39, who lives in Llanfechain with his wife and son, says the plans being considered are just another way for HMRC to get even more money out of small businesses and the record keeping will potentially be more onerous with mistakes proving much more expensive.
Rob, who is a tax expert said: “Whilst the timescale for payment to HMRC might seem quite generous to some people, you have to remember it can take anything up to nine months for HMRC to return a tax refund – so it really isn’t a level playing field.
“As an accountants we try and give our clients all the assistance and support we can to get their accounts filed on time, but small businesses are under a huge amount of pressure just to keep going, service their clients and build on what they do, so it is often the hardest working that struggle to find time for the paperwork side and under these new proposals they will have more to do and will be hit even harder.”
Although HMRC say under the new plans the person would only be punished for missing four quarterly deadlines consecutively, Rob believes the charges will put an additional strain on small business and he is urging people to take the opportunity to feed back to HMRC during the consultation process.
Rob said: “HMRC makes people aware of potential changes and then opens a consultation so if people have any concerns I would urge them to take part in the consultation and not just wait to complain after the changes happen.”
The proposals fall into a number of different consultations which were published on the HMRC website on 15 August 2016 and which close for comment on 7 November 2016.
Rob said: “ I would urge people to pay attention to what is being proposed and find out how it could affect their business and feedback to HMRC about what they think either way.”
Anyone who is confused about the changes and would like a free advice session can contact Rob here or e-mail email@example.com.