Why HMRC has decided to show no mercy!

Have you observed small children? They could prove to be really adamant and naughty at times. When they throw a tantrum, they are punished. It’s just an act of showing that the child’s behaviour is not appreciated.
Reward and punishment are two things that all of us respond to – the same is applied to businesses and individuals. If you do not pay your tax returns regularly, get ready to take a whack from the HMRC – oh, and a mighty whack that might be!
What is HMRC?
HMRC or’ Her Majesty’s Revenue and Customs’ is a department of the Government of the United Kingdom which is responsible for the collection of taxes. The focus of this organization is to make sure that all businesses and individuals file accurate tax returns to the government within the due date. Those who fail to do so could face strong and sometimes drastic consequences.
Why HMRChas increasedpenalties
The department has increased the penalties on late taxreturns tremendously mainly to ensure that those who evade tax do not enjoy an unfair advantage. The penalties are also designed in such a way as to ensure that people come forward with problems, if any, with their tax affairs. You have to take proper care of your tax affairs – you have to update the tax records regularly, check your current position and inform HMRC in case you find errors or conflicts of any kind in your records.
HMRC imposes several penalties for various reasons. Some recent changes in the penalty for late tax returns are mentioned below.
HMRC Penalties for late tax returns
As mentioned earlier, HMRCis taking harsh actions and increasing the penalties greatly for late tax returns. For instance, let us say you file your 2010/11 tax returns about six months after the said deadline of 31st January 2012. In that case, there will be a big penalty of £1,300, at the very least. This is much higher than £200 in the previous regime.
So you have to ensure that you submit the tax return well in advance, before the deadline of 31st January, 2012. Otherwise you would be paying a much higher price for the mistake.
Similarly, it should be noted that for all the 2010/11 tax returns (and the years that follow) late submission would be penalized heavily. The penalties will not be reduced in any case, despite your having paid all the tax amounts due on time.
There are also penalties, varying in amounts for a delay of more than 3 months, six months and 12 months.


Summary
Face it. You cannot evade tax. If you do, you will end up paying much more than it would have cost you in the first place! However, there are ways to minimize your tax burden by seeking the advice of jargon-free qualified accountants.
So be aware of your obligations and fulfil them!
Or get ready to take that mighty whack!