It has been revealed that tax inspectors have been trying to fine up to one million innocent people hundreds of pounds each for late tax returns.
HM Revenue Customs (HMRC) have admitted that 963,000 taxpayers were found to be unnecessarily registered for self-assessment (SA) in the past two years – that's one in 11 of the UK's 11 million people who are registered for SA every year.
Despite none of the taxpayers putting in SA tax returns for the last three years, they were still being notified of late filing penalties by HMRC's inspectors of an average of £300 each. They have now been taken out of the system altogether.
None of the taxpayers who had been wrongly fined had made any payments and an HMRC spokesman said: "We only want tax returns from people who genuinely need to complete them.
"We've removed 200,000 people from self-assessment who are now paid through PAYE but might have forgotten to inform us. We want to reassure these people that they won't have to pay any penalties, which is why we've cancelled them.
Chairman of the House of Commons Treasury, Nicky Morgan MP has been sympathetic to the plight of the people affected and said her select committee would consider investigating, commenting: "I know as a constituency MP just how stressful people find it being penalised by HMRC for something they don't owe.
"I appreciate HMRC have to deal with millions of taxpayers but they need to focus on those who really are trying to evade the tax system not those who shouldn't be filling in forms at all."
Tax accountants UK wide have said the system of penalising taxpayers who do not submit SA returns on time needs to be reformed. Currently taxpayers who are registered for SA are charged an automatic penalty of £100 if a tax return is up to three months late.
Jo's advice for any concerned taxpayers, "If you are receiving fines from HMRC for late tax returns but you believe you don't need to file a return, we would recommend doing something about the fines rather than ignoring them.
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