28.06.2008 NEW TAX PENALTY RULES ARE 'UNFAIR'

Taxpayers will be punished unfairly under a new penalty regime proposed by the government, it has been claimed.

HM Revenue & Customs wants to remove the need for the consent of its general or special commissioners when levying daily fines on taxpayers who fail to file their returns on time.

It has also proposed an additional fixed penalty for late filing one month after the due date, on top of the £100 fine already issued.

But the proposed changes would seriously undermine taxpayer protection, according to Bruce Wilson, tax partner at Campbell Dallas Chartered Accountants in Glasgow.

"Permitting HMRC to issue daily fines without authorisation from the commissioners would remove a vital legal protection for taxpayers against the arbitrary use of power," said Wilson.

"Regardless of whether taxpayers could appeal, the balance is shifted firmly in HMRC's favour and would inevitably result in greater use of daily fines".

Flaws in HMRC systems would mean more taxpayers are penalised through no fault of their own, added Wilson.

"HMRC systems fail to accurately record forms they do receive and therefore the worry must be that these failures, demonstrated annually, will lead to the automatic issue of these beefed-up penalties in some instances when they will not be due."

Wilson pointed out that the proposals coincide with the closure of several HMRC offices, making it harder for taxpayers to appeal incorrect penalties.