Vale & West Chartered Accountants Blog

HMRC: Penalty payments for non-compliance increase by 62 per cent

HM Revenue & Customs (HMRC) penalties for non-compliance by taxpayers have risen by 62 per cent, according to the latest research.

The data revealed that HMRC collected £34 million in penalties in September, which represents a significant increase from the figure in May, which dropped to £21 million.

HMRC suspended tax investigations in the spring because of the impact of the coronavirus pandemic, as it moved resources into helping taxpayers with emergency coronavirus support schemes such as the Coronavirus Job Retention Scheme (CJRS).

In total, the amount that HMRC has taken from penalties fell to £468 million in the year to September 2020, from £730 million the previous year.

Experts are now forecasting that there will be additional increases in penalty payments with HMRC shifting focus back to compliance work and tax investigations, particularly into the misuse of many of the Government’s coronavirus support schemes.

The first deadline for any businesses to report any over-claiming of furlough payments through the CJRS passed in October, with HMRC identifying more than 27,000 ‘high risk’ cases.

Businesses that did not take the opportunity to report any over-claiming of the furlough scheme are now being advised to prepare for HMRC to impose the most severe sanctions available.

Penalties can be as high as 100 per cent of the amount of tax that HMRC believes is owed, but this is dependent on whether mistakes arise as a result of deliberate negligence or through careless behaviour.

For help and advice on matters relating to tax investigations, contact our expert team today.

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