Tax Penalties are enforced by HMRC for various reasons and are more often than not the direct result of either procrastination or a lack of information. Ensure you don’t cut into your annual take-home pay by having to fork our hundreds of Pounds for penalties which could have been avoided in the first place.
Below are the penalties most often incurred. In each instance the penalty you will have to pay is always a percentage of the additional tax that was due or under-declared – this on top of the outstanding tax; and in some cases interest will be due as well.
Penalty for Inaccuracy
Tax documents and returns that have been filled in inaccurately will incur a penalty. HMRC will not penalise you if you take what they see as “reasonable care” to get your tax right. This includes:
- keeping accurate records
- checking with HMRC as soon as you don’t understand something
- being prompt in telling HMRC about any errors you notice in a tax document after you’ve sent it
Penalty for Failure to Notify
This penalty applies when you don’t tell HMRC on time that:
- your new business has made a profit
- your business turnover has reached the VAT registration threshold
- an asset sale made a capital gain
- you have started a business that must be registered with HMRC
- any other changes in your circumstances which may affect your tax position
Penalty for a VAT and excise wrongdoing
This penalty applies when you:
- issue an invoice that includes VAT when you aren’t allowed to charge VAT
- handle goods where Excise Duty has not been paid
- use a product in a way that changes how much Excise Duty should have been paid
- supply a product at a lower rate of Excise Duty when you are aware that it will be used in a way that warrants a higher Excise Duty rate
Optimise Your Tax Liability
One of the easiest and most reliable ways to ensure absolute tax compliance and the avoidance of penalties is to ensure you are partnered with a professional accounting firm with a long history of UK tax matters.
1st Contact Accounting is well positioned to optimise your tax liability. Their Personal Tax service includes personal tax returns, where they will perform all the necessary tax calculations, and then submit your return, on time and with 100% accuracy.
In these tough economic times, it makes sense to utilize the services of a leading professional, saving yourself (and your business) time, money and legal complications.
Visit www.1stcontact-accounting.com for more information or call 0808 141 1624 to speak to a friendly and highly efficient tax consultant.