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HM Revenue & Customs is believed to have increased its income from self assessment fines fourfold, since the new rules for penalties against self assessment taxpayers, according to a report in the Daily Mail earlier this month.

Previously, anyone who filed their self assessment tax return late would automatically face a £100 penalty, including individuals and partnerships. However, if no tax was outstanding the fine would usually be waived. This is no longer the case, and a fixed penalty of £100 will apply whether tax is outstanding or not.

Self assessment fines amounted to £20.8 million in 2009-10, but are expected to reach £90 million in 2010-11. According to a spokesperson for HMRC, the aim of the penalties was to encourage filing self assessment tax returns in a timely manner, rather than collect increased amounts in fines. McGrigors law firm has claimed that the attitude of HMRC is becoming much tougher. McGrigors used the Freedom of Information Act to obtain details of bankruptcy petitions filed by HMRC in Scotland. The number of petitions for bankruptcy has risen considerably by 97 percent during the previous three year period.

Speaking to the BBC, Pamela Muir, director of McGrigors said that HMRC were hardening their attitudes when it came to collecting tax payments. She also said:

“During the downturn there was a high level of support for business, but the taxman seems to be running out of patience with those who are unable or unwilling to settle their unpaid tax bills.”

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