The head of tax at City law firm Pinsent Masons has welcomed the prospect of a new approach on tax penalties from HMRC.
Jason Collins said HMRC’s current approach was “not fit for purpose” and advocated a system which allowed people to get off lightly for their first offence.
HMRC has recently published a 20-page discussion document on its penalties which said it would aim in future to charge fewer penalties, and for those which it does charge to be well-targeted and take into account someone’s compliance history.
Mr Collins said: “I certainly think the penalty system is not working effectively and it is clearly not fit for purpose.
“When they rewrote the rules in 2007 they took away the language of fraud and started talking about deliberate errors.
“But that makes it much easier to bring a penalty against someone.”
Susan Hill, a financial planner with Hertfordshire-based Susan Hill Financial Planning, said: “Most of the filing of accounts is online now and it is easier to do so HMRC should be much more active in getting people to be online and helping them file.”