Penalties to be points based

Drivers face disqualification from driving if they accumulate 12 or more penalty points for driving offences. The resulting ban can last from 4 to possibly 11 years depending on the gravity of the offence.

HMRC seem to think that this point based system is a good idea and they now intend to include draft clauses to the forthcoming Finance Bill that will introduce a points system covering the late filing of tax returns.

In their notes attached to the draft clauses HMRC say:

The government wishes to encourage compliance with regular return submission obligations but does not want to punish taxpayers who make occasional mistakes. The new late submission penalty regime, announced at Autumn Budget 2018, is designed to be proportionate, penalising only the small minority who persistently fall foul of the rules. Consistent compliance will be encouraged by the opportunity to clear penalty points without incurring a penalty charge. A stronger deterrent is provided in cases where behaviour is shown to be deliberate, and also by other compliance tools. The new regime is designed to be applicable to as many taxes with regular filing obligations as possible to provide a clear, transparent and consistent approach for taxpayers and HMRC.

The new points-based penalty regime will only apply to returns (including Making Tax Digital regular updates) with a regular filing frequency, for example monthly, quarterly or annually. It will not apply to occasional returns (for example a return required for a one-off transaction).

HMRC are unlikely to be suggesting, as with driving penalties, that if you collect enough points you will be banned from paying tax, but the liability to penalties will remain until a predetermined period of time has elapsed.

Latest Blog
14
Jul

HMRC – Digital Future Is Taking Shape

HMRC continues to modernise the UK’s tax system, with a range of new digital se...

Read More
09
Jul

July 2026 – One Of The Busiest Months In The Tax Calendar

For many businesses and taxpayers, July is one of the busiest months of the year for ...

Read More
07
Jul

Autumn Budget 2026 – What Could A Burnham Government Mean For Businesses?

The Autumn Budget 2026 is likely to be one of the most closely watched fiscal events ...

Read More
06
Jul

Are you affected by the High Income Child Benefit Charge?

Families claiming Child Benefit should be aware of the High Income Child Benefit Char...

Read More