HMRC outlines PAYE penalty plans
As part of the government?s plans for Making Tax Digital for business, HMRC has now outlined its plans for the future sanctions for late filing. Alongside this summary, it has also published a further consultation on simplified interest and late payment penalties. The plan is to introduce these together as a package.?The late payment penalty regime will be based around a points-based system. Legislation will be published in the summer of 2018. The plan is to implement VAT penalties in 2020, twelve months after the introduction of Making Tax Digital for VAT in 2019.
Key takeaway: With the introduction of a new penalty regime for VAT on hold until 2020, penalties for PAYE failures will continue to be risk assessed rather than automated for the 2018/19 tax year and beyond.
Bank account interest hits PAYE codes
Since the beginning of December 2017, HMRC has been matching interest received for single bank accounts for 2016/17, and provided by banks and building societies, to taxpayers? accounts. This allows for the tax on the interest received to be coded out through PAYE tax codes. This will apply to interest in 2016/17 PAYE tax calculations (P800s?and?PA302?simple assessments) and estimated interest in 2017/18 tax codes. However, the introduction of the personal savings allowance from April 2016 means that the vast majority of taxpayers who receive interest income will be unaffected because their interest income is below the allowance.