Figures recommend HMRC charged 420,000 penalties to people with incomes too low to pay any tax between 2018 and 2022.

The penalties have been issued for not submitting a tax return that means every individual would have acquired a penalty of at the very least £100.

An article from Tax Policy Associates calculated 40 % of all late submitting penalties that have been charged went out to folks on this class.

The group is looking for the legislation to vary so no person submitting late is required to pay a penalty above the quantity of tax they owe.

An individual has to earn at the very least £12,570 a 12 months earlier than they begin paying earnings tax on the primary price of 20 %.

There have been 184,000 penalties issued to individuals who don’t earn sufficient to pay tax within the 2020 to 2021 tax 12 months.

Analysts at Tax Policy Associates estimated some 600,000 penalties have been issued total to individuals who didn’t pay tax over the four-year interval. Some of those have been efficiently appealed and so weren't charged.

The group identified a few of these prices would have been issued to the identical individual, sharing figures displaying how an individual had accrued a invoice for over £4,900 from 2017 to 2020.

The group warned persons are falling into debt and even changing into homeless as they battle to pay the HMRC penalties.

Most people who find themselves in employment shouldn't have to file a tax return however others are required to, akin to people who find themselves self-employed as a sole dealer and who earns £1,000 or extra.

If an individual is required to submit a tax return, in the event that they miss the deadline they're routinely given a £100 advantageous.

After three months, the penalty will increase by £10 a day, as much as a most of 90 days, and after this extra penalties will be utilized.

A Government spokesperson stated: “The Government has recognised that taxpayers who occasionally miss the filing deadline should not face financial penalties, and has already announced reform of the system.

“Deadlines for returns are necessary for the efficient functioning of the tax system though, and we strongly encourage anyone who does not need to file a return to tell HMRC.

“Our aim is to support all taxpayers, regardless of income, to get their tax right and details of what to do if a person no longer needs to file a return are included in reminder letters every year.”

For the newest private finance news, comply with us on Twitter at @ExpressMoney_.