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Reduced Penalties Scheme Phase 2

• Reductions for Employers
• Reductions for Taxpayers

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Reduced Penalties Scheme - Phase 2

• Why "Phase 2"?

  Phase 1 of the Scheme, announced on 4 September 2009 attracted a large number of taxpayers who benefited from significant reductions in additional tax and interest. Phase 2 targets:

  • taxpayers (individuals or companies) who wished to benefit from the Scheme but could not submit their outstanding tax returns or pay their tax in time, and
  • employers who have not yet remitted all of their employees’ income tax and social security contributions.

Reduction of Penalties for Employers

• What must I do to enjoy the reductions in penalties?
• How can I benefit from the Scheme?
• If I opt not to benefit under the Scheme?
• Where can I get more information?

Reduction of Penalties for Taxpayers (Individuals/Companies)

• What are the benefits under this scheme?
• How much will I save?
• How can I benefit from the scheme?
• What are the consequences if i sign an installment agreement and, for some reason, do not abide by it?
• If I opt for the installment method of payment, will the additional tax and interest continue to increase as usual, until the whole amount is paid?
• Can I choose to benefit in respect of the “old” years only (up to year of assessment 1998) or the self-assessment years only (years of assessment 1999-2009)? In other words, is it all or nothing?
• I can’t see any reason why people who should have already paid their taxes are being given an amnesty, while people like myself who always pay their tax dues in time never receive any benefits!

Amounts due up to years of assessment 1998

• I have a tax balance for some years up to year of assessment 1998, as well as for years of assessment 1999-2009. Can I opt to settle the tax balance up to the year of assessment 1998 only?
• I have not submitted all my tax returns for the years up to year of assessment 1998. Do I have to submit all these to benefit from the Scheme?
• I have a pending objection against an assessment for one of the years up to the year of assessment 1998. Can I benefit under the Scheme in respect of those years in respect of which I have no tax in dispute, and leave the years under objection for a later settlement?
• I have an assessment which is under appeal before the Board of Special Commissioners or the Court of Appeal. Does the Scheme apply for me too?
• I cannot pay the full amount by 31 October 2010. Can I enter into an agreement with the Department, granting me the possibility of settling it by monthly payments?
• I have a tax balance up to year of assessment 1998. I am paying it by monthly installments according to an agreement with the Department. Am I eligible for the Scheme reductions too?
• I have a pending objection up to the year of assessment 1998. Am I obliged to participate in the Scheme?
• May I file an objection now against assessments up to the year of assessment 1998?

Amounts due for years of assessment 1999-2009

• I owe tax, additional tax and interest for the years of assessment 1999 to 2009. Does the Scheme apply to me too?
• I have been charged additional tax for late submission of my tax return, or for not submitting all my tax returns for years of assessment 1999-2008. Am I eligible for the reductions?
• I cannot pay the full amount by 31 October 2010. Can I enter into an agreement with the Department, granting me the possibility of settling it by monthly payments?
• I have an outstanding tax balance for various years from 1999 to 2009. Can I choose which years I want to benefit from the Scheme?
• Currently I am being investigated by the Tax Audits Section or the Tax Compliance Unit. How can I adjust my income for these years and finalize my case?
• I have a pending objection against assessments for years of assessment 1999-2009, and I am still waiting to be called for an appointment to discuss my objections. How can I benefit under the Scheme?
• I have an assessment which is under appeal before the Board of Special Commissioners or the Court of Appeal. Does the Scheme apply to me too?