HMRC sending £300 fines to people earning below certain amount

HMRC is sending out £300 fines to UK workers who are earning less than £13,000. More than 83,000 people earning too little to even owe any tax at all to have been slapped with £300 fines for failing to lodge self-assessment tax returns.

Only 17,000 of those fines were later cancelled on appeal. By contrast, only 20,000 people earning £100,000 or more were penalised. Those with low incomes fare even worse when it comes to the £300 fines handed out for filing a year late.

Half of all the 61,000 fines were to people who earn too little to pay tax. Some 12,000 were successful on appeal. Only 5,000 people earning more than £100,000 a year were fined. The figures have been uncovered under the Freedom of Information Act by the Tax Policy Associates (TPA) thinktank.

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A HMRC spokesperson said: “The government recognises that taxpayers who occasionally miss the filing deadline should not face financial penalties and reform of the system is under way. Our aim is to support all taxpayers, regardless of income, to get their tax right and avoid fines.

“The overwhelming majority of customers file on time.” Circumstances such as self employment can lead HMRC into demanding a tax return – with paper submissions due by October 31 or January 31 online. Turning in your tax return late can result in a fine even if you don’t owe tax, as the return confirms this status.

“It’s shameful that tens of thousands of people on very low incomes, often with difficult lives, have their lives made more difficult by HMRC penalties,” said Dan Neidle, the founder of TPA. “We should go back to how things were before 2010: nobody should have to pay a penalty if their income is too low for them to have a tax bill.”