Why is HM Revenue & Customs (HMRC) changing its penalties?
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. The new penalties apply to almost all the taxes, duties, levies etc we administer. The new legislation for these penalties is contained in the 2007 and 2008 Finance Acts. In these questions and answers, they are simply referred to as taxes or tax. The Government designed the legislation to make the tax system simpler and more consistent. HMRC undertook a wide-ranging review and public consultation covering 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 techn
