In the past five years, 600,000 people who owe no tax have been charged HMRC late-filing penalties, reveals the Tax Policy Associates (TPA).
The penalties start at £100, but can snowball into four- and five-figure debts: one woman with severe mental-health difficulties was pursued for £10,000; another was driven into bankruptcy.
A system that was intended to encourage timely tax filing has become, in the words of retired tax judge Richard Thomas “the most punitive in the world” for people on low incomes.
The previous Government promised to scrap the penalty for a single missed return and cap any bill at £200 – but this reform has vanished into the long grass.
It’s unjust. The Government should act, and stop the most vulnerable in society having their lives made harder by HMRC.
Read the full TPA report at: 600,000 HMRC penalties charged to people too poor to pay tax
