The seventh tax
How many different taxes do you and your business pay? We guess you pay at least six main taxes:
- business rates
- income tax
- corporation tax
- VAT
- national insurance
- capital gains tax
Other taxes may fall due when you buy shares or property, and when you die. There are also numerous customs duties and levies tied to purchases of cars, fuel, betting, insurance and air travel, to name but a few.
What do all these taxes and duties have in common – they all carry an extra optional charge: penalties.
HMRC can charge you a penalty when you are slow to comply with the deadlines for paying tax or submitting tax returns. Those penalties are normally imposed automatically with no human thought applied to the process. In this newsletter we explain how the number of occasions when “slowness” penalties can arise have ballooned in recent years – particularly for employers.
There are also new reasons for HMRC to hit you with a penalty, such as when you make a mistake on your tax return, or fail to tell HMRC that you are liable to register for a tax.
If you try to comply with a tax but do it wrong – such as filing a return on paper when you should file online, you can be charged a penalty for that. There also VAT and excise wrong-doing penalties, which we explain further below.
Penalties and their sibling, interest, should be regarded as the seventh major tax. We are here to help you pay the right amount of tax and to avoid penalties and interest entirely.