HM Revenue & Customs has issued a warning that all businesses could face a penalty as a result of failing to notify them of certain changes in their circumstances affecting their tax position. Failing to make HMRC aware of any changes to liability could result in a penalty which is up to 100 percent of the tax owed.

If a change occurs on or after 1st April 2010, a new form of penalty payment will apply. The penalty charged will depend upon the behaviour that caused the failure to notify. If the failure was a deliberate act, then HMRC will charge higher penalties. The penalties will apply when a company or person doesn’t inform HMRC of a liability to another type of tax, such as reaching the limits for paying Value Added Tax. If a person starts a new business or becomes a sole trader, they must inform HMRC of their intentions within the first three months of trading, as failure to do so will incur a penalty.

HMRC will reduce the penalty if there was a legitimate excuse for the failure to notify, as long as HMRC were informed as soon as they realised. Penalties are charged for missing any deadlines which are relevant to your business. Reputable small business accountants will explain which circumstances are relevant to the failure to notify penalties.

An online accountancy will have all information provided in real time, which will allow for them to inform HMRC on your behalf, avoiding penalties.

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About The Author

Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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