COM33050 - Background: typical case examples: company neither pays nor delivers
An established company fails to meet its payment and filing obligations.
COTAX automatically issues the first and second flat-rate (Word 32KB) penalty determinations. The Inspector makes a Revenue Determination (Word 29KB) in respect of estimated tax outstanding, together with the first tax-related (Word 30KB) penalty determination. The company incurs late payment interest (Word 27KB) which continues to run as no payment is made. COTAX automatically issues the second tax-related penalty determination.
The events are numbered chronologically, and identified as follows
- Business Event - Action taken or arising outside HMRC
- Automatic Event - Automatic computer action within HMRC
- Procedural Action - Action taken by an operator
Order & Type of Event |
Action(s) Taken |
1 (Business Event) |
Company AP ends (normal 12 month period) |
Approximately 1 month after the recorded AP ends |
|
2 (Automatic Event) |
COTAX
|
Some time later.................. |
|
3 (Automatic Event) |
First payment reminder (PR1) issued, 28 days before the normal due date (Word 49KB), as no payment or NIL payslip returned to Accounts Office |
4 (Business Event) |
Payment due date passes, with Nil paid |
5 (Automatic Event) |
Late payment interest starts to run on unpaid tax from the normal due date |
6 (Automatic Event) |
CT208 combined return and payment reminder issued 42 days before the filing date as no payment or NIL payslip has been received and the return has not been logged |
7 (Business Event) |
Filing date passes without receipt of a return |
8 (Automatic Event) |
COTAX records 1st Flat-rate Penalty (F1) stage reached, and company incurs Flat-rate Penalty of £100 or £500 as appropriate |
9 (Automatic Event) |
14 days later COTAX records 1st Flat-rate Penalty (F1) stage charged and issues the 1st Flat-rate Penalty |
10 (Automatic Event) |
30 days later COTAX issues a payment application for the Penalty |
Some time later.................. |
|
11 (Business Event) |
Filing date + 3 months + 1 day passes without receipt of a return |
12 (Automatic Event) |
COTAX records 2nd Flat-rate Penalty (F2) stage reached, and company incurs Flat-rate Penalty of £200 or £1000 as appropriate |
13 (Automatic Event) |
14 days later COTAX records 2nd Flat-rate Penalty (F2) stage charged and issues the 2nd Flat-rate Penalty |
14 (Automatic Event) |
30 days later COTAX issues a payment application for the Penalty |
Some time later.................. |
|
15 (Business Event) |
AP end date + 18 months + 1 day passes without receipt of a return |
16 (Automatic Event) |
Company incurs a 10 per cent tax-related penalty and the computer
And
|
17 (Procedural Action) |
Technical Caseworker makes
Note: If the Technical Caseworker chooses not to use PPEN, COTAX will automatically issue the penalties 14 days later |
18 (Automatic Event) |
COTAX issues notices of
|
19 (Automatic Event) |
30 days after the issue of the Revenue Determination and the penalty, COTAX issues first payment application |
20 (Automatic Event) |
14 days later COTAX issues further payment application |
21 (Automatic Event) |
14 days later COTAX issues the final payment application |
22 (Automatic Event) |
14 days later, as no payment received, Accounts Office refers the case to the local Debt Management office, and the LA (Word 28KB) (Local Action) signal is set |
Some time later.................. |
|
23 (Business Event) |
AP end date + 24 months + 1 day passes without receipt of a return |
24 (Automatic Event) |
Company incurs the 2nd 10 per cent Tax-related penalty and COTAX
And
|
25 (Automatic Event) |
Late payment interest continues to accrue on any unpaid tax from the normal due date |
For a list of forms relevant to this subject, see COM33011.
For a list of functions to use in particular situations, see COM33012.
For legislation applying to this subject, see COM33013.
