Ministers launch tax inaccuracies crackdown

News Article - Wednesday, March 19, 2008

filed under: Regulatory

Further information

People who make mistakes on their self-assessment tax returns are being warned that they could face tougher penalties as part of a new crackdown on errors.

Government plans announced by chancellor Alistair Darling as part of his 2008 Budget include plans to impose stricter regulation on taxpayers who fail to accurately state their income on returns.

Those who do not "take reasonable care" in completing their self-assessment returns could pay higher fines of up to 30 per cent of the unpaid tax under new powers awarded to HM Revenue and Customs (HMRC).

Frank Haskew of the Institute of Chartered Accountants told the Independent: "There are lots of concerns about the additional powers being awarded to HMRC, because in many cases it is very unclear how they will be applied."

Mis-stating income on tax returns has previously carried a penalty of just five per cent of the total tax owed, but the new penalties are much stricter, rising to 100 per cent for taxpayers who make deliberate omissions.

HMRC recommends that taxpayers complete their self assessment returns online and accounting packages can help people to calculate accurately how much tax they owe in order to avoid steep fines.

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