ATT suggests simpler sanction for tax that is paid slightly late.
The Association of Taxation Technicians is calling for the penalty rate of interest to accrue immediately from the due date but also that it should be cancelled if payment or a time-to-pay (TTP) arrangement was made within the first 15 days of the deadline. This would offer in effect a carrot for making payment or initiating an arrangement rather than a stick for failing to do so.
The ATT was responding to HMRC’s proposal for a new penalty of 2.5% of the tax paid between 16 and 30 days late. Tax paid (or made the subject of a TTP arrangement) before that would incur no penalty.
Yvette Nunn co-chair of ATT’s technical steering group said: ‘We cannot understand why HMRC thinks that encouragement to pay more promptly would be delivered by a penalty of 2.5% of the tax outstanding after just 15 days. That equates to...
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