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Prevent HMRC from levying disproportionate fines for late payment of PAYE

Comment 18th July 2010

Since May 2010 – as one of the last backhanded stealth taxes dreamt up by the previous administration – HMRC has started to levy onerous fines on late payers of PAYE contributions. These fines are out of all proportion to the severity of the misdemeanour of late payment. In the interests of natural justice and British traditions of fair play, the level of fines should be reduced to an amount which is proportionate to the reasonable costs incurred by HMRC in dealing with late payment.

Why does this matter?

At times of economic hardship and uncertainty, when many businesses are themselves struggling with late payment from customers and other cashflow problems, it is surely not the role of government to increase the pressures unduly. There is nothing wrong with a regime of fines or other sanctions, to discourage late payment – but the severity of the recent increase is bordering on cruel and unusual punishment. It certainly cannot be in line with the new Government's business friendly agenda and can only be a discouragement to many entrepreneurs who necessarily have to negotiate the peaks and troughs of cashflow without the luxury of a fat bank deposit or credit limit. 

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