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Low-income individuals face fines from HMRC even when they owe no taxes

Many low-income individuals are unaware they may need to file tax returns, even if they don't owe taxes. HMRC imposes late-filing penalties, even when no tax is owed.


The HMRC helpline, vital for assistance, is closed for the summer, causing concerns about access to accurate information.


Late filing penalties are now based on timing rather than owed taxes, which means those with no tax liability can be fined. This system has faced criticism for its fairness.


HMRC has proposed penalty reforms, but they are tied to Making Tax Digital for income tax self-assessment, delayed to at least April 6, 2026.


Suggested solutions include canceling penalties for those with no taxable income and actively removing low-income individuals from the self-assessment system. Monitoring penalties is also recommended to reduce the impact on low-income taxpayers.

Contact us for more information.

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