HMRC are consulting on draft regulations which will update the new late payment penalty rules, to enable HMRC to
assess the second of the two late payment penalties before the tax due has been
paid in full. The draft Penalties for Failure to Pay Tax (Schedule 26 to the
Finance Act 2021) (Assessments) Regulations 2024 will make the change. Under
the current position, HMRC can assess the second penalty when the amount of
outstanding tax is paid in full, within a two-year time limit. The two-year
period will still apply, but the change removes the potential avoidance
opportunity where taxpayers try to avoid the penalty by not paying the tax
before the end of that period (and where HMRC would then be out of time).
HMRC are consulting on draft regulations which will update the new late payment penalty rules, to enable HMRC to
assess the second of the two late payment penalties before the tax due has been
paid in full. The draft Penalties for Failure to Pay Tax (Schedule 26 to the
Finance Act 2021) (Assessments) Regulations 2024 will make the change. Under
the current position, HMRC can assess the second penalty when the amount of
outstanding tax is paid in full, within a two-year time limit. The two-year
period will still apply, but the change removes the potential avoidance
opportunity where taxpayers try to avoid the penalty by not paying the tax
before the end of that period (and where HMRC would then be out of time).
