CH60100 - Penalties for failure to file on time: Overview
A person must file their return, and other documents relating to the information on the return, on time. A person will be liable to a penalty when they do not file their returns or other documents on time.
The penalties for failing to file on time currently only apply to filing obligations under
- income tax and capital gains tax (excluding PAYE),
- bank payroll tax,
- the Registered Pensions Scheme, and
- the Construction Industry Scheme (CIS).
The penalties will be extended to other taxes in later years.
A person is liable to a penalty if they fail to file on time, unless they
- have a reasonable excuse for not doing so, and
- file the return or other document without unreasonable delay after the excuse ends.
Currently there are two penalty models.
- Penalty model for occasional returns and returns for periods of 6 months or more - applies to income tax, capital gains tax, bank payroll tax and Registered Pension Scheme returns.
- Penalty model for CIS returns.
Both penalty models involve a combination of fixed, daily and tax-geared penalties depending on how long the failure continues.
Where a return has been outstanding for 12 months or more, we examine whether the person deliberately withheld information by failing to file the return by the filing date, or at all, and whether the information withheld would enable or assist HMRC in assessing the person’s correct tax liability. A person can reduce certain penalties incurred after 12 months if they make a disclosure.
Higher maximum penalty percentages may apply after 12 months where the outstanding return involves an offshore matter.
When a person has incurred a penalty, we issue a penalty assessment. The person can appeal and is entitled to a review. Where we are unable to resolve an appeal on internal review, or if the taxpayer chooses to bypass the review process, the tribunal will hear the appeal.
We can agree to a special reduction of the penalty in special circumstances.
The penalty provisions in Sections 100 to 103 of TMA 1970 do not apply to a penalty under Schedule 55 FA 2009.