June Budget – Review of HMRC powers
Two Budget Notices were released in connection with the ongoing review of HRMC’s powers. They address:
New penalties for late filing of returns and payment of tax
The late filing and late payment penalty models are broadly similar. They are designed to encourage filing and payment by the correct dates by introducing an escalating series of penalties depending upon the number of failures within a set penalty period. Further penalties will arise if there is a prolonged delay in filing returns or paying the tax due. The implementation of these penalties requires significant changes to HMRC’s computer systems and will be brought into effect over the coming years.
Excise modernisation and compliance checks
This measure will update the compliance checking framework for excise duties including modernising information and inspection powers; and aligning the record-keeping rules and the time limits for assessments and claims with changes made to other taxes and duties. The changes are expected to take effect from 1 April 2011.
The Government will legislate for these measures in the Finance Bill to be introduced after the summer recess.