ATTEMPTS by HM Revenue & Customs (HMRC) to raise compliance with tax self-assessment regulations appear to have fallen flat as a million Britons seem likely to miss tomorrow’s deadline.
In past years, about a million people — or about one in ten of the total — have missed the January 31 deadline for filing self-assessment forms.
This year, HMRC sent shortened forms to one in ten of the 9.5 million self-assessment taxpayers and advised thousands more not to fill in a return.
HMRC said it could not confirm how many people would miss the deadline, but PricewaterhouseCoopers, the accountants, said nearly a million taxpayers would fail to complete their forms on time. Those who do not file on time stand to incur an instant £100 fine.
This comes as a new report says that 3.8 million people are paying the wrong amount of tax, usually too much, because the system is too complicated. The study, compiled for the Bow Group, the think-tank, showed that £1.24 billion in National Insurance payments were outstanding last April, and £575 million of tax due under the PAYE scheme was not collected in 2004-05.
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There is disquiet among accountants that some of those advised not to fill in a self- assessment form may have been in line for a rebate.
A spokeswoman for HMRC said that some taxpayers whose tax affairs were “static” were advised not to fill in a return this year. But she said that, in some cases, those who had previously received rebates may have been advised not to file a return.
Mike Warburton, of Grant Thornton, the accountant, said: “The aim was to take people out of the system who were already paying the right amount of tax through other means. It was not to interfere with the people who are due a rebate each year.”
However, the HMRC spokeswoman said those who were usually paid a rebate had been advised of other ways to claim their cash. She said: “People who receive annual repayments, for example those who receive a large amount of bank interest, may not be required to fill out a self-assessment form. They would be advised to complete alternative forms to reclaim their cash.”
John Whiting, of PricewaterhouseCoopers, said: “The Revenue needs to carry out more research to find out more about the type of people missing the deadline so that it can target these groups in future.”
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Taxpayers who miss tomorrow’s deadline face fines of £100 and interest charges of 6.5 per cent on tax due. Some may also be hit by £60-a-day penalties.
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