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Tough penalties for tax mistakes
Shropshire tax payers who make mistakes in their Annual Returns could now face much tougher fines.
Keith Winter, of Dyke Yaxley Chartered Accountants, in Shrewsbury, said new rules introduced this month by HM Revenue and Customs were much stricter than before.
"The rules have increased the penalties and tax payers could now be charged the full amount of any tax lost or under-declared."
"And anyone who fails to register a business for either tax or VAT on time could also be affected - previously the penalties were linked to the amount of tax lost."
"From now on, HMRC will combine the tax you've underpaid with an assessment of your past history, and they will also consider the quality of your records and accounts that go with your incorrect Tax Return."
"If you volunteer the missing information, and you can show you took reasonable care in preparing the Returns, apart from having to pay any lost tax, the penalties should be minimal or even nothing at all."
"But if you are proven to be careless or deliberately inaccurate, the situation will be very different - you could face penalties equivalent to the full amount of tax lost or under-declared, on top of paying back all the tax you owe."
"The days of taking boxes and boxes of unrecorded receipts to your accountant at the end of the year are well and truly over."
"To avoid these penalties, it's essential that you keep accurate records and are completely honest on your Returns."
"Remember a 100% penalty for a higher rate tax payer is equivalent to paying 80% tax on all your income."
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