SDLTM86590 - Compliance: Penalties

Contract settlements and abatement: Maximum tax-geared penalty chargeable

FA03/S99(2) operates to ensure that when two or more tax geared penalties are chargeable on the same tax HM Revenue & Customs can mitigate the penalties to produce a maximum penalty which does not exceed 100% of the tax payable on the land transaction return.

For example, this type of case could arise where

• there is a failure to deliver a land transaction return in respect of a chargeable transaction within 12 months of the filing date
• the land transaction return when submitted understates the amount chargeable to stamp duty land tax

Without FA03/S99(2) there could be

• a penalty under FA03/SCH10/PARA4 based on the full amount of the stamp duty land tax
• a penalty under Section FA03/SCH10/PARA8 based on the difference between the correct and returned stamp duty land tax

The maximum penalty will be restricted in these cases to no more than 100% of the tax payable. It is this figure which will then be subject to abatement.