HMRC to roll out penalty points system

HMRC will start rolling out a new penalty points system this month.

The tax office is trialling the programme with 100 taxpayers as part of the Making Tax Digital scheme before rolling it out to everyone who files a tax return.

Under the plan, those who miss self-assessment deadlines will get penalty points instead of an automatic £100 fine.

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For each deadline that is missed, one penalty point will be incurred.

When a threshold of points is met, they will have to pay a £200 fine.

The threshold set will be linked to the taxpayer's filing frequency.

For those who submit annually, two missed deadlines in two years would lead to a £200 fine.

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For those who submit quarterly, four missed deadlines in two years will result in a fine.

"The new penalty regime is simpler and fairer than the previous system. The new system will penalise those who persistently do not comply by missing filing and payment deadlines, while being more lenient on those who occasionally fail to meet obligations," HMRC said in a previously published policy paper.

An HMRC spokesperson said: "We're committed to helping customers get their tax right to avoid fines altogether. Our fairer penalty points system for late returns will mean that only Making Tax Digital customers who persistently miss deadlines will incur a financial penalty."