HMRC issues 600,000 fines – to people who owe no tax
The tax office applies an automatic £100 fine if someone misses the tax return deadline of January 31, with penalties increasing over time and escalating to more than £1,600.
Workers who earn more than £1,000 in self-employment income are required to file an annual tax return, which means even those below the £12,570 tax-free allowance could be hit with a penalty for late filing.
Between 2018 and 2023, 600,000 penalties were charged to taxpayers with no income tax liability, according to figures obtained by Tax Policy Associates via a Freedom of Information request. This includes multiple penalties received by the same individual.
Dan Neidle, of the think tank, said he had heard from 'hundreds' of those affected, many of whom had serious physical and mental health difficulties.
He said: 'The Government should act, and stop the most vulnerable in society having their lives made harder by HMRC.'
The Freedom of Information request revealed that those who owed no tax were more likely to face a late penalty than any other group based on income decile.
Some may have been fined by mistake after earning less than the £1,000 trading allowance.
Anyone who believes they have been incorrectly fined for filing late can appeal directly to HMRC within 30 days of the penalty notice being issued.
HMRC said it had cancelled around one third of late submission penalties over the past three years.
The previous Conservative government introduced a new penalty regime, which it described as 'simpler and fairer'. Under the points-based system, there will no longer be an immediate £100 fine if the deadline is missed, and penalties will be capped at £200 per tax return.
However, only taxpayers joining Making Tax Digital will be subject to the new regime. Those earning over £50,000 in self-employment income will be brought into HMRC's digital drive from April 2026, dropping to £20,000 by 2028.
Taxpayers outside of Making Tax Digital will continue to be assessed under the old regime.
The Low Income Tax Reform Group (LITRG) has warned this creates a 'two-tier' system, where low earners pay thousands of pounds more for filing late.
Antonia Stokes, of the group, said: 'LITRG would like to see HMRC speed up its roll-out, so that all taxpayers can benefit from the new penalty regime.
'If this is not possible, there are a series of tweaks HMRC could make to the existing regime that will bring it closer to its replacement, and mitigate some of these harshest effects.'
These tweaks include greater leniency towards those who have missed the deadline just once, and easier exit from self-assessment for those who no longer need to file a tax return.
A spokesman for HMRC said: 'Our aim is to help people to get their tax right and avoid fines altogether, and 11.5 million customers filed their 2023-24 tax return on time. If you no longer need to file a tax return, including because your earnings are lower, check using our online tool and then tell us to avoid a penalty.
'Those who believe they've incorrectly received a penalty for filing late can appeal. We can cancel penalties when a reasonable excuse is provided.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
31 minutes ago
- The National
Celtic are spending like a club in the throes of buyer's remorse
Last summer, Scotland's champions came under pressure to smash the piggy bank with a hammer. Criticised for a lack of signings in the January window, chairman Peter Lawwell acknowledged the 'inherent inefficiencies' of hoarding £67.3million in savings. It made more sense to spend the money on players than it did to hand a chunk over to HMRC in corporation tax. To that end the Parkhead board started throwing money at players. They broke their transfer record once to sign Adam Idah from Norwich for a fee close to £9m. They repeated the trick when they took an £11m punt on Belgian midfielder Arne Engels. By the time they'd added American defender Auston Trusty for £5.5m, Brendan Rodgers looked like a man who'd rolled the dice and won a fiscal power struggle with the people who think the club should stick to buying cheap, selling big and stockpiling punts like Gustaf Lagerbielke and Yang Hyun-jun in the hope of peeling away the wrapper one day and finding a Matt O'Riley underneath. How different it all looks now. Despite a respectable tally of 21 goals, Idah is no one's idea of a first-choice starting striker. Given a full pre-season Engels may yet deliver a decent return on the sizeable investment in his services, but has still to scale the heights. If an English club offered Celtic their money back on Trusty, you suspect they'd snap their hand off. If Dermot Desmond has made up his mind that Celtic are simply no good at spending large sums of money then the solution shouldn't be a return to the days of raking around the bargain bin for players of £3million or less. In a market turbo-charged by middle eastern oil money that doesn't buy you much, and it makes more sense to fine-tune the recruitment process until they master the art of spending their Champions League windfalls wisely. It's not as if they're running out of cash. Celtic could feasibly became the first Scottish club to store up bank reserves of £100m in the near future. And, while UEFA's financial sustainability rules will limit spending on player wages, transfer fees and agent fees to 70 per cent of a club's revenue, the champions are in no danger of landing an expensive slap on the wrists from Europe's governing body. They're too cautious for that. Read more from Stephen McGowan: Infantino's latest vanity project is ridiculous – enough is enough Is Dermot Desmond absentee landlord or Celtic mastermind? The spending hasn't dried up completely. They've completed a £20m upgrade of their Barrowfield training centre. The wages committed to Kieran Tierney's return, meanwhile, represent a significant financial commitment for a team in the Scottish Premiership. Throw in the signings of Swedish attacker Benjamin Nygren, Fulham prospect Calum Osman, back-up keeper Ross Doohan and Japanese defender Hoyata Inamura, and they've gone earlier than usual. Rodgers claims there is still plenty going on in the background and perceptions of a window can change quickly. By the end of August they could add another three or four marquee signings and supporters could be cock-a-hoop over with the business done. Given the lack of trust fans have in the board, few are getting their hopes up. Over the years Celtic's fear of missing out on Champions League money has fostered a level of caution which makes that very scenario more likely. Hoarding millions in the bank further risks nudging Rodgers towards the door next summer. The current window is likely to have a bearing on his decision and they're hardly going the extra mile to keep him. Financially secure, he doesn't need the job or the pressure. Family factors and the familiarity of six years in Glasgow will be other considerations and, while he deliberates, Celtic might be reluctant to hand millions and millions of pounds to a manager yet to commit. Ironically, that reluctance to give him the backing he needs to sign the players that he wants makes it more likely that he'll leave. He did it once before. And the longer this situation rumbles on, the more Rodgers' words, soundbites and body language will be studied with forensic intensity for evidence of a clue to his innermost thoughts. When Inamura, a 23-year-old defender from Japan, pitched up before the pre-season friendly against Queen's Park, the manager gave the impression that his input into the signing had been limited. Asked if Inamura would be ready to go straight into the first team Rodgers replied: 'No, he won't be. He's a part of the investment of the club.' While he softened his comments after a promising debut for the Japanese defender against Cork City, the episode felt like a flashback to Marian Shved the Ukrainian winger who came, saw, and left after three appearances. While Tierney and Nygren should improve the team which finished the Scottish Cup final defeat to Aberdeen with Jonny Kenny up front, Greg Taylor in midfield and Yang shanking cross after cross off the pitch, it's hard to say for certain that the starting XI is significantly better. Online, fans are already bickering over the area where the need to strengthen is most great. Some say attack, some say defence. Despite winning a double last season, there's a case for saying they're both right. Two wingers, a central defender, a contingency for the potential departure of Reo Hatate and a proper goal scorer is baked in. Depending on how Inamura shapes up, they could still bring in another left-back with reports in Belgium linking Flavio Nazinho of Cercle Brugge. Do all that for less than the £17m they've raked in for Kuhn and fiscal caution will start to look like a high-risk gamble. In the summer of 2014, Celtic lost a Champions League qualifier to Maribor of Slovenia and 200 angry supporters gathered in the car park. Frustrated by a perceived lack of spending on players, Lawwell was forced to address the frustration by making a commitment. In a question-and-answer session, the current chairman pledged that every penny Celtic earned would be reinvested. 'In terms of investment our policy, our commitment, is that every penny that comes into the club will be reinvested, it will go back into the club,' said the then CEO. 'I do not think we can be clearer than that. There is no pile of cash sitting there that we can look at, watch, feel and touch. It doesn't exist.' Fast-forward 11 years and Celtic's rainy day fund could insulate them from the impact of a tsunami. While cash in the bank dropped to £65.4m at December 31 last year, they've since raked in tens of millions from the Champions League. They've sold their top striker Kyogo Furuhashi to Rennes for £10m, Kuhn to Como, and cashed in a hefty £5m sell-on clause from Jeremie Frimpong's move to Liverpool. That's a lot of money to reinvest in the club. If keeping the manager is the name of the game, they really should get cracking.
Telegraph
33 minutes ago
- Telegraph
Farage urges Reform councils to ditch ‘virtue-signalling' net zero targets
Nigel Farage has pressured Reform-led councils to scrap 'virtue-signalling' climate emergency targets amid concerns they are 'massive diversions of time'. Eight in 10 local authorities across Britain declared so-called climate emergencies between May 2019 and 2023, with many racing to beat each other into announcing their green-focused pledges. The floodgates were opened six years ago after the House of Commons agreed on a motion tabled by Jeremy Corbyn for Parliament to declare an emergency. Local authorities vowed to follow suit by devoting millions of pounds to decarbonise offices, waste collection trucks and all council-run services. Rather than opt for a 2050 deadline – as agreed by Parliament – the majority of councils pledged a more ambitious 2030 target. Mr Farage, whose party gained control of 10 county councils two months ago, told The Telegraph the net zero pledges need to be ditched. He said: 'They need to be scrapped. It's not the job of county councils to deal with global issues, and it wouldn't make any difference at all if they were scrapped. 'It costs money and they are a massive diversion of time. It's virtue-signalling.' Mr Farage's comments come after he said in May that staff working on climate change initiatives should be 'seeking alternative careers'. Of the 10 councils Reform gained control, the party inherited seven climate emergency policies. Kent County Council last week became the first Reform-led authority to announce cost-savings plans of £40m by cutting net zero spending. It declared a climate emergency in 2019. In a move described as 'reckless' by critics, Lincolnshire County Council scrapped its flood management scrutiny committee in May, while Derbyshire County Council axed its climate change committee and cancelled all climate-related meetings. 'We have no idea how much it all costs' Since committing to their climate emergencies, various councils across the UK have been accused of ploughing millions into eco targets at the expense of cutting key services. For example, cash-strapped Lambeth council – which has dimmed streetlights to save money – spent £25m on climate initiatives such as 'rain gardens' and low-traffic neighbourhoods between 2019 and 2024. An investigation by The Times last year found the Labour-run south London authority paid more than 40 staff members at least £100,000 a year, including a 'director of climate and inclusive growth' on £160,000. Pembrokeshire County Council, which vowed in 2019 to become net zero by 2030, is poised to launch a review into its climate emergency after councillors raised concerns over its cost and deliverability. Cllr Mike Stoddart, who previously branded the emergency 'virtue signalling on stilts', successfully tabled a motion last month to start a review. He said: 'We have no idea how much it all costs and there has been no accountability for years. The UK is responsible for just under 1pc of global CO2 emissions, and Pembrokeshire's population of 120,000 is roughly one five hundredth of that of the UK. 'If the council ceased to exist, it would make no difference whatsoever to the Earth's climate.' A meeting of Pembrokeshire's full council – which is coalition-led – will decide whether to pursue a review at a meeting this month. Council papers show that it does 'not currently have an assessment' of the costs of its climate emergency, despite previously pledging to publish bi-annual reviews. Elsewhere, in Merseyside, Sefton Council, which has reduced emissions by 43pc since 2019, said it is 'clear that a substantial amount of investment will be required' to reach net zero by 2030. External funding is needed, but a progress report goes on to state that the council 'must carefully evaluate its position in the coming years'. Councils taking 'minimum action' Having announced climate emergencies, some councils have taken the most 'minimum action possible', according to watchdog group, Climate Emergency UK. Damning findings show that only a quarter of councils have turned at least 10pc of their vehicle fleet electric since pledging to decarbonise. Isaac Beevor, of Climate Emergency UK, said some councils are 'driving forward local climate action', yet others are falling short. He said: 'There are councils which continue to lag behind, taking the minimum action possible.' Having ranked every local authority's performance, the watchdog concluded progress across the UK is 'slow', with hundreds of councils not on track to meet their own self-declared net zero targets. Climate Emergency UK scored councils across seven categories of performance, ranking them on a score from 0 to 100. Just 62 of the 391 councils assessed scored higher than half marks. Rutland came bottom of the pile for county councils, while Castle Point (Essex) ranked last for district authorities. At the other end of the scale, Islington council topped the overall chart. Mr Beevor said: 'We are calling for climate action to be a fully funded legal duty for all UK councils, as we need all councils to be creating the zero-emission communities we need to thrive.' Two-thirds of councils were not confident of meeting their targets, according to a survey published by the Local Government Association (LGA) last year. Adam Hug, a spokesman for the LGA, said: 'The Government will not meet its net zero goals without empowering councils to deliver local climate action in every village, town and city. 'With the right support, local areas could cut carbon quicker and for less money, while boosting the local economy and ensuring local people benefit.'
Daily Mail
34 minutes ago
- Daily Mail
Claire's Accessories in 'last ditch' rescue plan ahead of looming £355m debt repayment
Claire's Accessories has reportedly brought in advisers to draw up a last-ditch rescue plans ahead of a debt repayment. The high street retailer, which has 300 shops in Britain, has hired restructuring specialists Interpath to search for investors for all or part of its UK operations, according to The Telegraph. The last-ditch plan comes ahead of a looming debt repayment on a $480million (£355million) loan which has to be repaid by December 2026. In a bid to reclaim some costs, there are concerns a restructuring could lead to closures among its 2,300 stores across the world, and pull out of some countries completely. At the same time, Claire's Accessories UK arm has racked up losses of £25million over the last three years. In the year to March 2024, it fell £4.7million into the red, a slight fall from £5million in the previous period, while turnover dipped to £137million. It has also struggled with increased US import costs as President Trump hiked tariffs on goods from China, where the majority of the items it sells come from, and competition from online retailers like Amazon. It is the latest setback for Claire's Accessories after it filed for Chapter 11 bankruptcy in the US to restructure its debts. In 2018, Elliot Management and Monarch Alternative Capital took control of its stores as former creditors. And it is reported that it is now working with advisers at Houlihan Lokey and Alvarez and Marsal on a deal for its US operations to seek bankruptcy protection. Claire's Accessories joins other British high street staples that are struggling with ballooning costs. WH Smith agreed to sell its 480 stores to Hobbycraft owner Modella Capital and will rebrand to TGJones, while River Island recently announced 33 store closures blaming rising costs and customers shopping online.
