HM Revenue and Customs has released new guidelines regarding penalties for anyone who may fall under the umbrella of the Construction Industry Scheme, or CIS.  The purpose of the new guidelines is to encourage people to comply with regulations related to CIS by trying to alter behaviour patterns.  The new guidelines are also meant to be just and not overly aggressive.

A recent study conducted by MORI revealed that people might view paying taxes as less of a priority than other bills that might be due at the time.  As times are difficult during the current recession, some people are choosing to pay bills that will allow them to keep their business running instead of paying their taxes.  If HMRC were to impose harsher penalties, they could potentially put a number of companies out of business.  The goal of the new guidelines is simply to come up with reasonable penalties.

According to the document released by HMRC “There is absolutely no doubt that in considering how to encourage people to file returns and pay tax due on time, penalties are only a small part of the picture. Simplifying those obligations where possible, clearly communicating what taxpayers need to do, and providing accessible targeted support, are likely to have more effect than penalties on their own.”

It does appear that penalties can be effective.  In instances where no penalty is issued for a late payment, the rate of payment is frequently lower.

Source: www.accountingweb.co.uk

 

 

Recommended Posts

Leave a Comment