HMRC has published draft clauses to be included in Finance Bill 2018-19 which introduce a new ‘points based’ financial penalty regime for the late submission of returns. It is hoped that the new regime will align the penalty position across a number of taxes.
How will the proposed rules work?
The new rules will apply to returns that are filed with a specified frequency. Occasional returns, such as SDLT returns, will not be subject to these new rules and will remain within the current regime. Failure to submit a return of the type specified by the required deadline will generate a ‘penalty point’. When a person reaches a specific number of points, they will become subject to a penalty. The detail on the quantum of the penalties that will be applied has not yet been included a this stage of the process.
The maximum number of penalty points that can accrue before a penalty is assessed, will depend on the frequency of the return being filed:
