Taxation: Self-assessment

Treasury written question – answered on 11th January 2021.

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Photo of Kirsten Oswald Kirsten Oswald Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Work, Pensions and Inclusion), SNP Deputy Leader

To ask the Chancellor of the Exchequer, how much (a) interest and (b) penalties was charged to self-assessment taxpayers who failed to meet the deadline for payment of tax for the previous financial year in each of the last three years; and how many taxpayers received such a charge in each year.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

The value of interest raised on late tax return payments and late payment of penalties, and the number and value of penalties charged to self-assessment taxpayers for late payments of tax for each of the previous three tax returns, are provided in the following tables. It has not been possible to separate interest for late tax payments from interest for late payment of penalties.

These figures are correct as at 28 December 2020 but are not final. The 2018-19 figures are particularly subject to change because they do not include the 12-month late payment penalties due to timing and large value penalties which can be raised based on information held at the time, but which are subsequently cancelled or reduced once the correct information is provided. For this reason it is not possible to make meaningful comparisons between figures from different years.

Late payment penalties can only be issued following receipt of a Self Assessment tax return, or where HMRC make a determination of tax liability for the financial year where no return has been delivered. As HMRC receive further late returns or amended returns from taxpayers, additional late payment interest and penalties may be issued or cancelled for earlier years.

1. The value of interest charged on late tax payments

Tax Year to which Interest Relates

Value of Late Payment Interest (£)

2016-17

£73,757,000

2017-18

£64,990,000

2018-19

£43,528,000

1a. The number of customers with interest charged on late tax payments

Tax Year to which Interest Relates

Number of Customers

2016-17

1,195,800

2017-18

1,191,700

2018-19

922,700

2. The value of penalties raised for late tax payments

Tax Year to which Penalties Relate

Value of Late Payment Penalties (£)

Raised

Cancelled or reduced to nil

Net remaining

2016-17

£161,219,000

£46,701,000

£114,518,000

2017-18

£146,004,000

£34,376,000

£111,628,000

2018-19

£311,867,000

£196,420,000

£115,447,000

2a. The number of customers with penalties raised for late tax payments

Tax Year to which Penalties Relate

Number of Customers

Raised

Cancelled or reduced to nil

Net remaining

2016-17

363,100

62,100

301,000

2017-18

336,800

49,300

287,500

2018-19

348,500

31,500

317,000

3. The value of interest charged and penalties raised for late tax payments

Tax Year to which Interest/Penalties Relate

Value of Late Payment Interest and Penalties (£)

2016-17

£188,275,000

2017-18

£176,619,000

2018-19

£158,975,000

3a. The number of customers with interest and/or penalty charges raised for late tax payments

Tax Year to which Interest/Penalties Relate

Number of Customers

2016-17

1,210,300

2017-18

1,227,300

2018-19

1,034,400

Notes on the tables:

All counts have been rounded to nearest 100; all values have been rounded to nearest 1000. As such, totals may not always sum due to rounding.

Interest is chargeable on late payments on account and late balancing charge payments. Penalties are chargeable on late balancing charge payments only. As such a taxpayer may be liable to late payment interest charges or late payment penalties, or both.

These figures have been produced using an extract of the data provided for analytical purposes, and there may be small differences between this and the live Self-Assessment system.

Penalties are not used as a means of generating revenue. HMRC want taxpayers to comply with their obligations.

HMRC charge penalties to encourage taxpayers to meet their tax obligations and to act as a sanction for those who do not, so the majority who do pay correctly and on time are not disadvantaged.

HMRC recognise that because of the exceptional circumstances presented by COVID-19 some taxpayers will not be able to meet their tax obligations on time, or appeal or review HMRC decisions within the usual time limit; HMRC’s approach has been to collect the tax and penalties due in a way that recognises the very real needs and challenges that businesses and individuals are facing, supporting those in difficulty, including considering coronavirus as a reasonable excuse for missing return deadlines.

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