HMRC plots fines for firms that pay taxes on time
British firms that pay their tax in full and on time could be fined for choosing the wrong way to pay under plans now sitting on the Chancellor's desk.
TL;DR
- Businesses that pay taxes in full and on time could be fined if they do not use Direct Debit.
- HMRC proposes Direct Debit as the default payment method for VAT and PAYE.
- Firms using traditional bank transfers might need an exemption to avoid penalties.
- An estimated 2.4 million employers, sole traders, and companies could be affected.
- HMRC's consultation acknowledges that most taxpayers pay on time and late payment is often due to oversight.
- The financial impact of the proposed scheme is not yet confirmed by HMRC.
- Businesses might lose the extra days currently allowed for electronic payments.
- Accounting bodies and financial institutions have expressed strong objections to the plan.
- Shadow Chancellor criticizes the plan as a way for Labour to raise funds.