The UK government has announced new regulations regarding Penalties for Failure to Pay Tax (Schedule 26 to the Finance Act 2021) (Assessments) Regulations 2024 on 12 November 2024 aimed at tightening penalties for late tax payments. The updated rules allow HMRC to charge this second penalty towards the end of the two-year limit, irrespective of whether the tax debt is paid off.
This change is designed to prevent taxpayers from deliberately avoiding the second late payment penalty by delaying their tax payments until the end of the assessment period.
Previously, this second penalty could only be imposed once the full amount of tax was settled, within a two-year assessment period.
These regulations will come into effect on 4 December 2024. For a concise summary of the late payment penalties regime, check the detailed Tax Information and Impact Note via the provided link.
