Draconian penalties for late filing of tax returns could be on their way as the Revenue fails to meet its targets for self assessment returns filed on time.
A report by the National Audit Office (NAO) reveals that more than £1 billion is owed in overdue income tax returns with young men, self-employed builders and people living in London the worst culprits.
The Revenue has a target to increase the percentage of returns filed on time to 93 per cent by January 2008. Despite attempts to simplify the self-assessment process, the NAO's report shows the percentage of returns filed on time has been between 90 and 91 per cent in each of the past four years.
The NAO's report found that more than a million forms were overdue last year, many from 'untraceable' tax payers. The Reveue has launched a review of its penalty system after the NAO said the current regime is not working.
At the moment, people that file their tax return after the 31 January deadline face a maximum £100 fine or the amount of tax owed, if less than £100.
It is reported that HM Customs and Revenue are considering measure which include fining late filers a percentage of the tax owed, increasing the automatic £100 fine, imposing a fine even if the taxpayer subsequently shows no tax is owed or basing the fine on the taxpayer's net income. It could also make greater use of the little-used £60 daily fines, which, according to the NAO, 'would be particularly appropriate for wealthy late or non filers to whom a £100 penalty may have no deterrent impact.'
HM Customs and Revenue is also attempting to make the form simpler and easier for people to return. Measures include a new four-page form for those with more straightforward financial affairs and a greater use of online filing.
Sir John Borne, head of the NAO said: "The changes being made by the Revenue to simplify income tax self-assessment tax returns should ease the burden for many taxpayers. No less important is that those who persistently fail to submit tax returns be brought to book."
A report by the National Audit Office (NAO) reveals that more than £1 billion is owed in overdue income tax returns with young men, self-employed builders and people living in London the worst culprits.
The Revenue has a target to increase the percentage of returns filed on time to 93 per cent by January 2008. Despite attempts to simplify the self-assessment process, the NAO's report shows the percentage of returns filed on time has been between 90 and 91 per cent in each of the past four years.
The NAO's report found that more than a million forms were overdue last year, many from 'untraceable' tax payers. The Reveue has launched a review of its penalty system after the NAO said the current regime is not working.
At the moment, people that file their tax return after the 31 January deadline face a maximum £100 fine or the amount of tax owed, if less than £100.
It is reported that HM Customs and Revenue are considering measure which include fining late filers a percentage of the tax owed, increasing the automatic £100 fine, imposing a fine even if the taxpayer subsequently shows no tax is owed or basing the fine on the taxpayer's net income. It could also make greater use of the little-used £60 daily fines, which, according to the NAO, 'would be particularly appropriate for wealthy late or non filers to whom a £100 penalty may have no deterrent impact.'
HM Customs and Revenue is also attempting to make the form simpler and easier for people to return. Measures include a new four-page form for those with more straightforward financial affairs and a greater use of online filing.
Sir John Borne, head of the NAO said: "The changes being made by the Revenue to simplify income tax self-assessment tax returns should ease the burden for many taxpayers. No less important is that those who persistently fail to submit tax returns be brought to book."
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