New penalties for submitting incorrect tax returns, and new powers for HM Revenue and Customs (HMRC), already came into effect on 1 April 2009. However, the need to maximise tax revenues and prevent tax evasion has led the Chancellor to go further:
• From April 2010 employers will become liable to new penalties for repeated late payment of monthly PAYE amounts in any 12 month period. There will be no penalty on the first occasion, but a penalty of 2 percent of the late paid amount will apply on the second occasion, rising to 5 per cent on the third and all subsequent occasions. Any payment that Is more than 6 months late will incur an additional 5 per cent penalty, followed by still another 5 percent if it is over 12 months late.
• New higher penalties will also be introduced for the late filing of most types of tax return, including PAYE and Construction Industry Scheme returns.
• From a date to be announced, taxpayers who become liable to penalty of at least £25,000 for deliberate tax evasion will be “named and shamed”. This could have serious repercussions for some taxpayers, but they may be able to avoid having their names published if the approach HMRC and give details of their misdemeanours.
• It is also proposed that taxpayers who deliberately evade tax of at least £5,000 will have to submit more detailed returns for up to five years afterwards.
A worrying note on which to end, but an indication of where HMRC is going. Businesses which fail to meet their tax payment or tax filing obligations will clearly need to tighten their procedures if they are to avoid substantial extra costs from next year onwards.
