Stealth tax hits non-tax payers
Published May 2010
Another stealth tax is about to creep up on the unsuspecting public, an expert has warned.
Steven Holden, an associate at Midlands law firm MFG Solicitors, says many more people are set to be caught by £100 penalties.
And that could see HM Revenue & Customs raking in hundreds of thousands of pounds extra.
HMRC dishes out the penalties to those who are late with their tax return. But if they are not due any tax or, because of a trust situation, it doesn’t apply, then the charge is normally waived.
“We probably get 20 cases a year like this where the individual, because they know they have no tax to pay, simply ignores the notice requiring them to file,” said Mr Holden.
“We fill out a tax form for them and the matter is dropped. Now they will have to pay the £100 even though they didn’t have any tax to pay in the first place. So my message is – don’t ignore HMRC letters detailing the filing of an annual return.
“If you don’t arrange to have it filled in then you will be fined.”
“Basically it is a stealth tax. It is typical HMRC – it is not particularly well thought out and not particularly well advertised.
“I picked up a whisper about this and it took even me a while to find the reference… and I know where to look.”
But, he stressed, there was no need to panic yet.
“It is not being implemented until the 2010/2011 tax year so there is still time to do something about it.
“However, people need to be on the ball or they could be in for an unpleasant shock.”
