HMRC needs a rethink on penalties

Some 180,000 workers have been fined by HMRC, even though they don’t owe any tax!

It has been revealed that the UK tax office has dished out thousands of penalties to those earning below the income tax threshold. In all some 184,000 workers were fined for failing to file a tax return last year. This is even though they do not earn enough to pay income tax (£12,570).

Tax Policy Associates said many of those affected are in severe financial difficulties and have been subject to extra fines and interest after not totally ‘getting’ what was going on. In some cases, the fines amount to thousands of pounds, which will take years to pay back.

TPA’s Dan Neidle said: “We believe the law and HMRC practice should be changed. Nobody filing late should be required to pay a penalty that exceeds the tax they owe.”