Letter from Jane Kennedy
I don't believe they can apply penalties as they are treating this as late payment of tax not an attempt to hide income. I refer you to the following extract from a letter I received, via my local MP this morning, from Jane Kennedy (Financial Secretary to the Treasury).
The letter of 19th March from HMRC to Mr ***** was to alert him (as a user of the avoidance scheme) to Clause 55 and to warn him that, like any other person who pays tax later than the due date for payment, he would additionally be liable to interest... The payment of such interest is not a penalty but merely represents commercial restitution for the late payment of tax.
As an aside, you may also find the following extract of interest.
The Government has always limited the use of retrospection as far as possible, isolating it to the worst cases of avoidance to ensure fairness and certainty for all taxpayers... But, in exceptional circumstances, the Government reserves the right to use retrospection where it is fair, proportionate and in the public interest to do so.
Originally posted by helen7
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The letter of 19th March from HMRC to Mr ***** was to alert him (as a user of the avoidance scheme) to Clause 55 and to warn him that, like any other person who pays tax later than the due date for payment, he would additionally be liable to interest... The payment of such interest is not a penalty but merely represents commercial restitution for the late payment of tax.
As an aside, you may also find the following extract of interest.
The Government has always limited the use of retrospection as far as possible, isolating it to the worst cases of avoidance to ensure fairness and certainty for all taxpayers... But, in exceptional circumstances, the Government reserves the right to use retrospection where it is fair, proportionate and in the public interest to do so.
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