A new criminal offence for corporates that fail to prevent human rights abuses?
In advance of the 31 January tax return deadline, HM Revenue and Customs (“HMRC”) have revealed some of the worst excuses used by taxpayers for missing the submission date. The excuses – all of which were used in unsuccessful appeals – were as follows:
Although the excuses may be amusing, HMRC were making an important point: namely, that they have a wide (and growing) range of powers to impose penalties on taxpayers for failure to meet a tax liability on time, and that taxpayers face a high burden in demonstrating a “reasonable excuse” not to pay tax when due.
Generally, failure to pay tax on time will result in “failure penalty” and will normally take the form of one-off or daily flat-rate penalties. Failure penalties may not arise if HMRC (or an appeal tribunal) consider that there is a reasonable excuse for the failure. Typically, this will only arise where the delay has been caused by unexpected events beyond the taxpayer’s control.
Complying with HMRC can be particularly complicated for taxpayers with financial affairs in multiple jurisdictions. An individual may be living, for example, in Australia, but still have tax filing obligations in the UK. The rules on tax residence and domicile are complicated and it is always better to seek legal advice about your tax position before HMRC start an investigation.
Should you have any questions about any of these issues – and in particular about your tax residence and domicile status – please contact Zoë Sive or a member of the private client team. You may also be interested in reading the following blogs:
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