Interest - Working Towards a Harmonised Regime consultative document - LITRG response
In any new regime of interest and penalties, the key principle is that late payment may lead to an interest charge and late filing may result in a penalty, but in general there should be no overlap. Although HMRC published separate consultations on each, it is our view that interest and penalties are closely-related issues. The LITRG's response to the Interest - Working Towards a Harmonised Regime consultative document can be accessed below.
Except perhaps in the case of very late payment, the principle should be that late payment attracts an interest charge whereas late filing attracts a penalty. Some form of penalty ‘capping’ should be preserved to protect low-income taxpayers, possibly by reference to income rather than tax liability.
Contact Name: Robin Williamson (Tel: 0844 579 6700 , Fax: 0844 579 6701)