Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much (a) interest and (b) penalties was charged to self-assessment taxpayers who failed to meet the deadline for payment of tax for the previous financial year in each of the last three years; and how many taxpayers received such a charge in each year.
The value of interest raised on late tax return payments and late payment of penalties, and the number and value of penalties charged to self-assessment taxpayers for late payments of tax for each of the previous three tax returns, are provided in the following tables. It has not been possible to separate interest for late tax payments from interest for late payment of penalties.
These figures are correct as at 28 December 2020 but are not final. The 2018-19 figures are particularly subject to change because they do not include the 12-month late payment penalties due to timing and large value penalties which can be raised based on information held at the time, but which are subsequently cancelled or reduced once the correct information is provided. For this reason it is not possible to make meaningful comparisons between figures from different years.
Late payment penalties can only be issued following receipt of a Self Assessment tax return, or where HMRC make a determination of tax liability for the financial year where no return has been delivered. As HMRC receive further late returns or amended returns from taxpayers, additional late payment interest and penalties may be issued or cancelled for earlier years.
1. The value of interest charged on late tax payments |
| |
Tax Year to which Interest Relates | Value of Late Payment Interest (£) | |
2016-17 | £73,757,000 | |
2017-18 | £64,990,000 | |
2018-19 | £43,528,000 |
1a. The number of customers with interest charged on late tax payments
|
2. The value of penalties raised for late tax payments | |||
Tax Year to which Penalties Relate | Value of Late Payment Penalties (£) | ||
Raised | Cancelled or reduced to nil | Net remaining | |
2016-17 | £161,219,000 | £46,701,000 | £114,518,000 |
2017-18 | £146,004,000 | £34,376,000 | £111,628,000 |
2018-19 | £311,867,000 | £196,420,000 | £115,447,000 |
2a. The number of customers with penalties raised for late tax payments | |||
Tax Year to which Penalties Relate | Number of Customers | ||
Raised | Cancelled or reduced to nil | Net remaining | |
2016-17 | 363,100 | 62,100 | 301,000 |
2017-18 | 336,800 | 49,300 | 287,500 |
2018-19 | 348,500 | 31,500 | 317,000 |
3. The value of interest charged and penalties raised for late tax payments | |
Tax Year to which Interest/Penalties Relate | Value of Late Payment Interest and Penalties (£) |
2016-17 | £188,275,000 |
2017-18 | £176,619,000 |
2018-19 | £158,975,000 |
3a. The number of customers with interest and/or penalty charges raised for late tax payments | |
Tax Year to which Interest/Penalties Relate | Number of Customers |
2016-17 | 1,210,300 |
2017-18 | 1,227,300 |
2018-19 | 1,034,400 |
Notes on the tables:
All counts have been rounded to nearest 100; all values have been rounded to nearest 1000. As such, totals may not always sum due to rounding.
Interest is chargeable on late payments on account and late balancing charge payments. Penalties are chargeable on late balancing charge payments only. As such a taxpayer may be liable to late payment interest charges or late payment penalties, or both.
These figures have been produced using an extract of the data provided for analytical purposes, and there may be small differences between this and the live Self-Assessment system.
Penalties are not used as a means of generating revenue. HMRC want taxpayers to comply with their obligations.
HMRC charge penalties to encourage taxpayers to meet their tax obligations and to act as a sanction for those who do not, so the majority who do pay correctly and on time are not disadvantaged.
HMRC recognise that because of the exceptional circumstances presented by COVID-19 some taxpayers will not be able to meet their tax obligations on time, or appeal or review HMRC decisions within the usual time limit; HMRC’s approach has been to collect the tax and penalties due in a way that recognises the very real needs and challenges that businesses and individuals are facing, supporting those in difficulty, including considering coronavirus as a reasonable excuse for missing return deadlines.