The scandal with regard to the self assessment £100 penalty is that, of course, originally the penalty was limited to the amount of tax due - thus if you filed your tax return late but owed no tax, no penalty was charged. It was a deliberate act of government to remove this limitation to the penalty charge which now hits the most vulnerable and probably individuals who should not have been in the self-assessment system to start with.
Is this a "numbers game" by HMRC to show their success levels yet only illustrates the ease of grabbing low hanging fruit. It would be great if they could illustrate the top end successes...if any.
I've had this happen multiple times but managed to have all late filing penalties revoked - the taxpayer either made less than the personal allowance or made a loss. On the one occasion that HMRC appeared to dig their heels in, I said that I would get the taxpayer's MP to call them and they caved in immediately.
I am not sure that HMRC bothering low earners is necessarily a bad thing. We have a system where most tax is paid by a minority of citizens, but this minority is paying close to half of their income (47% marginal + 20% VAT on what is spent.) This is a substantial burden - it is more than French serf peasants paid to their lords. It is also relatively unusual for non-slave labourers, both historically and geographically and is mostly an artefact of post-war Europe. These taxes are levied in a rather oppressive way, with chaotic marginal rates (which you documented here) and aggressive pursuit of people who made innocent mistakes (e.g. the contractors debacle.) Now, the big difference with French serfs is that this taxation system is governed in a democratic way. As the tax levying becomes more concentrated, there is a risk that the majority of population that pays no income tax or a little of income tax + NI through PAYE starts thinking that tax is something only paid by "other" people. In a democratic system, this may lead to the increasingly oppressive system for the heavily taxed but mostly geographically mobile minority which is both unfair and unsustainable. Thus, to be stable, the tax base has to be broad and inflict cost and inconvenience on the majority. However, as we do not really want to impose a large cost on low-income people the inconvenience caused to them has to be non-zero for the system to be sustainable.
The scandal with regard to the self assessment £100 penalty is that, of course, originally the penalty was limited to the amount of tax due - thus if you filed your tax return late but owed no tax, no penalty was charged. It was a deliberate act of government to remove this limitation to the penalty charge which now hits the most vulnerable and probably individuals who should not have been in the self-assessment system to start with.
The great thing is that if you are rich you can just make a little side deal with HMRC and avoid any further serious bother.
Are you aware of any cases in which that happened?
Yep. Remember our former chancellor of the exchequer?
Didn't he pay £5m? Although, whether that was a "fair" amount or not I do not know.
Is this a "numbers game" by HMRC to show their success levels yet only illustrates the ease of grabbing low hanging fruit. It would be great if they could illustrate the top end successes...if any.
I've had this happen multiple times but managed to have all late filing penalties revoked - the taxpayer either made less than the personal allowance or made a loss. On the one occasion that HMRC appeared to dig their heels in, I said that I would get the taxpayer's MP to call them and they caved in immediately.
Excellent tip Sam
The point is he was not prosecuted. Just cut a deal. That's your two tier justice.
I am not sure that HMRC bothering low earners is necessarily a bad thing. We have a system where most tax is paid by a minority of citizens, but this minority is paying close to half of their income (47% marginal + 20% VAT on what is spent.) This is a substantial burden - it is more than French serf peasants paid to their lords. It is also relatively unusual for non-slave labourers, both historically and geographically and is mostly an artefact of post-war Europe. These taxes are levied in a rather oppressive way, with chaotic marginal rates (which you documented here) and aggressive pursuit of people who made innocent mistakes (e.g. the contractors debacle.) Now, the big difference with French serfs is that this taxation system is governed in a democratic way. As the tax levying becomes more concentrated, there is a risk that the majority of population that pays no income tax or a little of income tax + NI through PAYE starts thinking that tax is something only paid by "other" people. In a democratic system, this may lead to the increasingly oppressive system for the heavily taxed but mostly geographically mobile minority which is both unfair and unsustainable. Thus, to be stable, the tax base has to be broad and inflict cost and inconvenience on the majority. However, as we do not really want to impose a large cost on low-income people the inconvenience caused to them has to be non-zero for the system to be sustainable.
The point is he was not prosecuted. Just cut a deal. That's your two tier justice.