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| CURRENT SECTION :: Money News | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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The biggest change yet to the self-assessment tax system is about to be ushered in alongside a new lenient stance to taxpayers who miss its deadline for genuine reasons. For the first time since the system’s birth a decade ago, taxpayers who self-assess their affairs on paper must get their returns in by October 31, rather than January 31. Equally as unprecedented is the policy that those with a “reasonable excuse” for missing the deadline may be let off, rather than receive an instant penalty of £100. Legislation does not define a “reasonable excuse” but a software failure, a serious illness, bereavement, or the loss of tax records in the post are each likely to qualify. Taxpayers hit by such circumstances can then submit a 'reasonable excuse claim' with their tax return, or get their advisor to do so, for HM Revenue & Customs to consider. Until now, taxpayers had to claim a reasonable excuse after HMRC issued a late filing penalty – a move that advisors said was unfair for those legitimately constrained. Introducing the advance claim procedure will allow HMRC to suppress many penalty notices and save time, said the Chartered Institute of Taxation, welcoming the move. However, claiming the tax return was late because of work pressures, an advisor, or due to its complexity will not be seen as reasonable excuses in the eyes of HMRC. Without a valid claim for reasonable excuse, late returns of individuals who have not paid all their tax on time can attract a penalty of up to £100 per individual. HMRC said a reasonable excuse only exists where an “exceptional event beyond the control of the taxpayer prevented completion and return” of their accounts by the deadline. Oct 15, 2008 Email this article Printer friendly page Previous Page
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