IOM Announces New Penalties On Employers
Thursday, February 18, 2010
In an effort to improve employer
compliance, the Isle of Man has announced legislative changes that will introduce three new penalties on employers: a penalty
for ITIP paid late, a late return penalty, and a failure to comply penalty. A tax amnesty was also announced, which will run from April 2010.
The first new piece of legislation – the penalty for ITIP late payments
– enables any late monthly remittance to be subject to a penalty. ITIP
was introduced in 1987, and is paid by employers on behalf of employees receiving
Manx occupational pensions, with income tax assessed on their actual earnings
for the year of assessment, rather than the earnings for the previous year of
assessment. Under the new legislation, any payment or part payment of ITIP made
later than the ninteenth day of each month will be liable to a 5% penalty. Any
amount which remains outstanding after a further six months will then be liable
to a 5% additional penalty.
The legislation also states that an employer’s annual return that is
submitted late will be subject to a civil penalty. Any return submitted later
than 30 days from the end of the tax year, or 30 days from the date of cessation
as an employer, will be liable to a GBP250 penalty, together with a penalty of
GBP50 per day that the return continues to remain outstanding. The legislation
introduces a criminal offense if the return remains outstanding for more
than six months.
The third penalty will apply to any failure to comply with the Income Tax (Instalment
Payments) Act 1974 or the Income Tax (Modified ITIP) Regulations 1987. Any instance
of non-compliance with the above legislation will be liable to a GBP250 penalty.
This includes the failure to notify that an employer has commenced
or ceased to act as an employer.
Lastly, the Treasury has announced that a disclosure amnesty will take place
for three months during the tax year commencing April 6, 2010. By concession,
the Assessor will waive the imposition of penalties in respect of any voluntary
disclosures of previously omitted income made by taxpayers during the period.
Interest charges will still apply.