Why has HM Revenue & Customs (HMRC) changed its penalties?
The Government designed the legislation to make the tax system simpler and more consistent. HMRC inherited a variety of different penalties from both Customs and Excise and the Inland Revenue. Multiple penalty systems can cause confusion and lead to inconsistency. This can also result in an unnecessary administrative burden. HMRC undertook a wide-ranging review and public consultation covering its powers, deterrents and safeguards, known as the ‘Powers Review’, before the introduction of the new legislation. The Powers Review consulted a wide range of customers, representative bodies, accountants, HMRC staff and others during the development of the new penalties. HMRC staff, accountants and representative bodies have also helped develop the technical guidance and the operational and process guidance. During the consultation, customers and their agents said they wanted a fair system and told HMRC to do more to support those who tried to get their tax right, but come down hard on those w
