Trust IHT penalties: good news from HMRC


(jane) #1

For a new trust client I submitted a series of proportionate charges and ten year charge to HMRC. I had warned the client about the large late filing penalties as some of the returns were more than 10 years overdue. HMRC provides details of the penalties at IHTM36023. The penalties for this client were higher than the tax due.

Good news therefore from HMRC this week who have charged penalties of only £785 instead of £12,700. Their letter says that the penalties are being revised where the tax involved is less than £5,000 or between £5,000 and £50,000. A table then follows with, for example, penalties being £10 per month instead of £100 per month.

I hadn’t seen any notification of these reduced penalties. Are there any website links to them?

The new penalties seem much more reasonable and more in proportion to the error made by the client.

Jane Evans
Jane Evans Taxation Limited