- At the Spring Statement 2025, the government launched a consultation titled Behavioural penalties reform, seeking views on options to simplify and strengthen behavioural penalties which are currently in place. It builds on the responses to the 2024 call for evidence The Tax Administration Framework Review – enquiry and assessment powers, penalties, safeguards.
- This consultation proposes two different approaches to reforming behavioural-based penalties, specifically penalties for inaccuracy and failure to notify:
- Reforming the existing framework: this approach would retain key aspects of the existing penalty system but simplify how penalties are calculated and applied. This could involve reducing the number of penalty categories, standardising how behaviour is assessed, and making the rules clearer and easier to follow.
- Exploring an alternative model: this approach considers a more fundamental redesign of penalties to improve clarity and consistency. It looks at whether a different structure could better achieve fairness, compliance, and deterrence while reducing complexity for taxpayers, agents, and HMRC.
- Timing: the consultation closes on 18 June 2025.
Resources (click to open)
- Behavioural penalties reform (HMRC, March 2025)
