Automatic late tax filing penalties replaced by points system

The draft UK Finance (No.3) Bill, published last week, includes measures to end the current automatic £100 penalty system for late filing of tax returns, and replace it with a points-based system aimed at repeat offenders.

The points system was first announced at the last Budget in November 2017, in connection with HMRC's Making Tax Digital (MTD) programme. MTD puts a significant extra reporting burden on small businesses and landlords, prompting concerns that the penalties system needed to be made less rigid. The new points system will take into account the taxpayer's recent compliance history before a late-filing penalty is imposed.

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