New penalty regime will create unfairness, ATT cautions

HMRC’s planned new penalty regime for late payment of tax will result in unfair outcomes for taxpayers who had agreed to pay by instalments the Association of Taxation Technicians has warned.

The association is concerned that under the proposals as drafted any breach of the terms of a time-to-pay (TTP) agreement could result in it being treated as if it had never existed. The government’s proposals are designed to encourage taxpayers to pay on time or to encourage early contact with HMRC to arrange a TTP plan if tax cannot be paid.

Jon Stride co-chair of the ATT technical steering group said: ‘We can see the sense in incentivising early contact with HMRC whenever a taxpayer has been unable to pay a tax liability by its due date. We can also see the need to prevent abuse of the TTP provisions.’

The worry was that...