Meeting the obligation to file returns and pay tax on time - 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 'file and pay' consultative document can be accessed below.
We think more focus needs to be given to the ways in which HMRC can help people to file and pay on time rather than simply aligning penalty and interest regimes across the various taxes. Often people fail in their tax responsibilities for reasons such as confusion and financial or personal difficulties rather than wilful delinquency.