Taxman's new way to fleece us - fines

The tax system is clearly a joke. It seems like every day we hear about a new blunder from the taxman, and new bills for unpaid tax. Only those who fill out their own self-assessment forms seem to have been free from these almighty foul-ups, because HMRC has effectively handed something that should be their job to the poor unsuspecting taxpayer.

And now the taxman has a nasty shock in store for this group of taxpayers too.
Huge fines
The plan is to massively hike the fine for sending in your tax return late - from £100 to anything up to £1,300 for the coming tax year. Now by anyone's standards that's an impressive rise.

HMRC's Stephen Banyard told the Telegraph: "The old £100 penalty was not much of a deterrent and these new penalties, which increase over time, will get people to submit returns as soon as possible. Basically the greater the delay, the greater the penalty." And if you take your time, you will be severely punished. You'll be charged £100 for being a day late, then after three months the charges start rising by £10 a day. If you are six months late there's another tranche of charges, and finally there's another tranche if you're a year late - at which point you will be left owing £1,300.

HMRC is arguing that at £100, the fine isn't enough to put people off, and that chasing late payments is too time-consuming for the stretched staff. It's a reasonable point, especially given the fact that there's a huge axe swinging through the organisation as we speak.

However, it overlooks one small thing. Where is the fine for the HMRC? How about a £100 fine for every mistake they make, with a £10 a day charge for every day of worry over whether we are going to get an unexpected tax bill, with a further tranche of charges when we receive a bill and a further tranche when it starts to hit our household finances.

That would even things up a bit - where everyone who makes mistakes is forced to pay for it, rather than us having to pay for our mistakes, and those of HMRC into the bargain. The good news is that once these fines were taken into account, most people hit by blunders wouldn't be forced to repay anything, which would save thousands from financial hardship.

But no, as ever the taxman is a harsh taskmaster - but lets itself off far too easily.

What can you do?
If you're a higher-rate taxpayer or self employed, therefore, it will pay even more to be organised in sending in your tax return this year. It's not anyone's favourite task, but if you can start thinking about it in April, as soon as the tax year is over, then you have eight months to get round to it - which should avoid all the pain of the last-minute rush and the hell of having it hanging over your head at Christmas.

But what do you think? Are the new charges fair? Is it our fault anyway for being late in the first place? Let us know in the comments

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