CH62240 - Penalties for failure to file on time: types of penalties for failure to file on time: occasional returns and returns for periods of 6 months or more: 12 month further penalties: amount of penalties
This page currently only applies to returns required for income tax, capital gains tax, bank payroll tax, the registered pension schemes legislation, annual tax on enveloped dwellings and stamp duty reserve tax. It does not apply to the Construction Industry Scheme (CIS), see CH62300+.
Once you have examined the behaviour of the person, see CH62200, and concluded whether the withholding of information was
- deliberate and concealed
- deliberate but not concealed, or
- not deliberate
you charge the 12 month further penalty at the appropriate percentage as follows.
Note that higher maximum penalty percentages may apply if the outstanding return involves an offshore matter, see CH112600. Currently these only apply to income tax, capital gains tax and registered pension schemes.
Deliberate and concealed
The penalty is the greater of
- 100% of any ‘liability to tax which would have been shown in the return’ in question. See CH63560 for how to quantify a tax-geared penalty when the return or document has not been filed, and
- £300.
The ‘liability to tax which would have been shown in the return or document’ is the net liability to tax for the period taking into account any tax deducted at source. It is not reduced by any amount that has been paid towards that liability.
We can reduce this penalty if the person made a disclosure, see CH63100+.
Deliberate but not concealed
The penalty is the greater of
- 70% of any ‘liability to tax which would have been shown in the return’ in question, see CH63560, for how to quantify a tax-geared penalty when the return has not been filed, and
- £300.
We can reduce this penalty if the person made a disclosure, see CH63100+.
Any other case (not deliberate)
Where the person did not deliberately withhold information to prevent us from assessing their liability to tax, the penalty is the greater of
- 5% of any ‘liability to tax which would have been shown in the return’ in question, see CH63560 for how to quantify a tax-geared penalty when the return has not been filed, and
- £300.
We cannot reduce this penalty if the person made a disclosure, see CH63100+.
We calculate the penalty as a percentage of the tax liability that would have been shown in the return. A person can demonstrate more than one behaviour regarding information in that return. The penalty is calculated using the highest penalty percentage that is applicable. See CH63500+ for examples of calculations.
The penalties are not reduced by any amount that has been paid towards that liability.
See CH62900+ if the outstanding return relates to a partnership.