Taxpayers who fail to submit their tax returns on time will be penalised based on how many “points” they’ve accumulated, according to new Government plans.

Under new proposals, the £100 instant fine will be replaced by a driving licence-style points system.

The new structure will penalise those who are consistently late or make errors on their tax return.

“A customer would receive a point each time they failed to provide a submission on time. When the points reach a certain threshold a penalty would be charged. The points are reset after a period of good compliance,” says the HM Revenue & Customs (HMRC) consultation paper.

“Points are designed to ensure that isolated failures do not attract a penalty. But where the desired improvement in filing takes place, resetting points to zero rewards that improvement and encourages the establishment of a firm habit of providing submissions on time.”

The latest figures suggest that around 840,000 taxpayers incurred a £100 fine for missing this year’s January deadline.

To find out how the points-based system might work, you can find the HMRC consultation paper here.