With start of the Euros the matter of penalties springs to mind. Unfortunately the penalties I have in mind are the tedious ones imposed by HMRC, not the nail biting shoot outs!
There can be penalties for not making returns and for making late returns. There can be penalties (as well as interest charges) for paying late.
If you give HMRC inaccurate information you become liable for a penalty.
The penalty will be a percentage of the tax potentially underpaid and be quite low (even zero) for a simple honest mistake, it increases if you have been careless, gets worse if you deliberately give inaccurate information and can hit 100% of the tax potentially underpaid if you try to conceal the fact that you have deliberately given inaccurate information. If the inaccuracy relates to overseas matters it will double with a potential maximum of 200%!
Penalties can be reduced by informing HMRC of the inaccuracy before they find out by other means, providing all the information necessary to enable HMRC to work out the correct amount due and generally cooperating with HMRC.
The best strategy is to avoid penalties altogether. Make sure that you understand what returns you are making and when they should be sent in. If you think that you will struggle to pay a tax bill contact HMRC and negotiate some time to pay before the payment deadline. Finally make sure that the information you give them or your accountant does is complete and accurate.
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