COM101020 - Penalties: penalty determinations: computer support

COTAX deals with determinations of flat-rate (Word 28kb) and tax-related (Word 26kb) penalties by

• Calculating the standard filing date (Word 38kb) for every return required in response to the service of a notice to deliver (Word 24.5kb) 
• Enabling you to record a revised or deferred filing date. (For more information see business area ‘Notices And Returns’)
• Issuing a reminder (CT205 or CT208) to the company 42 days before the filing date, if the return remains outstanding. The reminder includes a warning about the consequences of late filing and the penalties that may be incurred. There is no issue of a copy to the agent
• Recording the occurrence of apparent liability to a penalty for each period for which a return is late under

• Para 17(1) & (2) Sch 18 FA 1998
• Para 17(1) & (3) Sch 18 FA 1998
• Para 18(1) & (2) Sch 18 FA 1998

• S94(1) TMA 1970
• S94(5) TMA 1970
• S94(6) TMA 1970

• Making and issuing flat-rate penalty determinations automatically, when
• A return has not been logged onto COTAX before the expiry of 14 days from the first flat-rate (F1) or second flat-rate (F2) penalty stage reached signal being set
• Neither the Inhibit Penalty, nor the No Penalty Required signal is set. For more information see subject 'Penalty Inhibition Signals' (COM101100)
• Making and issuing the first 10% tax-related penalty determination automatically
• 14 days after you issue a Revenue Determination in the absence of a company tax return, and if you have not already issued the penalty using Function PPEN (Prepare Penalty Determination)
• Making and issuing the second 10% tax-related penalty determination automatically, when
• The 10% tax-related penalty has been determined or amended and there is no open appeal
• The return is still outstanding 24 months after the end of the AP
• There have been no changes to either the tax liability or the amount of tax unpaid, since the 10% tax-related penalty was determined or amended

COTAX also

• Allows you to make flat-rate and tax-related determinations manually using Function PPEN (Prepare Penalty Determination)
• Gives you the option of going from the assessing functions to the penalty function when
• You use one of the assessing functions to create or amend the tax charge

• It calculates that a penalty should be charged or amended

• Issues notices of penalty determinations and explanatory letters to companies with copies to any authorised agent

For further information, see this example which shows the normal sequence of events where a company fails to file its return and triggers the full cycle of automatic late-filing penalties (Word 71.5kb).

For legislation applying to this subject, see COM101011.