The taxman threw self-employed Brits a bone today and decided to delay the first five per cent penalty on unpaid self-assessment debt.
Taxpayers who owe the HMRC less than £30,000 can set up a Time to Pay arrangement with HMRC through its online portal. However, those who owe more will need to organise a bespoke payment plan by phoning HMRC.
Jim Harra, HMRC’s boss said the impact of the Covid-19 pandemic on the self-employed influenced the decision to iffer the reprieve
“Anyone worried about paying their tax can set up a payment plan to spread the cost into monthly instalments. Support is available at gov.uk to help anyone struggling to meet their obligations.”
More than 8.9 million individuals and businesses have already filed their tax return. Anyone who is self-employed or a partner in a business partnership must send a tax return to HMRC.
Dawn Register, head of tax dispute resolution at BDO welcomed the delay in late penalties.
“This is an exceptional move from HMRC and a very welcome one as we are living in exceptionally difficult circumstances. This change will specifically support people struggling with their financial affairs, and offers additional and much-needed respite.”
The IR35 has come under criticism before for being “too complex”, according to Andy Chamberlain from the Association of Independent Professionals and the Self Employed (IPSE).
Analysis by IPSE claimed that the code is so unwieldy that HMRC has lost the majority of cases that it has brought to court regarding the tax code.