COM101150 - Penalties: penalty determinations: time limits
Flat-rate penalties
You may determine a flat-rate (Word 28kb) penalty under the provisions of S103(4) TMA 1970, at any time within six years after the date the penalty was incurred or began to be incurred.
As an example, assume that A Ltd is required to deliver a return for the AP ended 31/12/2009. The filing date (Word 38kb) is 31/12/2010, but it fails to deliver it until 01/02/2011.
A flat-rate penalty is incurred on 01/01/2011 and it can be determined at any time up and including 01/01/2017.
Tax-related penalties
A tax-related (Word 26kb) penalty may be determined under the provisions of S103(1)(a) and (b) TMA 1970, at any time up to the later of
- Six years after the date the penalty was incurred
Or
- Three years after the final determination of the tax on which the penalty is based
As an example, assume that B Ltd is required to deliver a return for the AP ended 31/12/2009 by the filing date, 31/12/2010.
It fails to deliver its return until 01/08/2011 and makes no payment before that date.
The liability for the AP ended 31/12/2009 is finally determined on 01/01/2015 showing tax due of £10,000.
A tax-related penalty can be determined at any time up to 01/01/2018, being three years after the relevant amount of tax is finally determined. This is later than 01/07/2017, six years after the penalty was incurred.
Note: Appropriate penalties will have been automatically brought into charge as they arose, unless system inhibitions prevented this
For legislation applying to this subject, see COM101011.
