ECH21045 - Penalties: Incorrect P11D or P9D Returns

Before an ECO pursues these penalties the papers will have to be submitted to the Authorising Officer, via the ECUM or the Area Director.

The review papers should always be sent with the submission and should include

• a brief summary of the facts
• a computation of the tax arising from errors and omissions.

The Authorising Officer will advise on

• whether to proceed for penalties
• the amount of penalty to seek
• the level of penalty and
• the form of offer

Section 98(2) TMA 1970 provides a maximum penalty (before abatement) of £3,000 for each fraudulently or negligently ECH21050 incorrect return. Circumstances in which these penalties may be appropriate are

• the employer has refused to settle the employees' tax
• there has been a previous voluntary settlement of liability on employees' benefits. Then a repetition of the situation in later years is discovered
• further benefits are discovered for the same period for which a previous voluntary settlement has been negotiated
• very large cases (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
• where errors or omissions appear to be a deliberate attempt by the employer to conceal employee benefits.

To save unnecessary submission, in any case which seems worthwhile contact TAA by telephone for advice (This text has been withheld because of exemptions in the Freedom of Information Act 2000)