How and why HM Revenue and Customs raises assessments, applies penalties and charges interest.
If you haven’t declared air passenger duty correctly we’ll send you an assessment. If your actual figures aren’t available we’ll consider all the facts and make a decision about how much duty you owe.
We assess errors made in accounting periods that ended 4 years ago or less. In cases involving fraud or dishonesty, we may extend the period we assess to 20 years.
We’ll issue an assessment if either:
- you don’t submit returns
- your returns look incomplete or inaccurate because:
- you haven’t kept or produced any records
- your accounts and records look incomplete or inaccurate
We issue assessments within strict time limits within:
- 1 year of us having enough facts to make an assessment
- 4 years of you becoming liable for duty
We’ll extend this to 20 years in cases of dishonesty.
You must pay an assessment of duty immediately. We’ll recover assessments as a debt if you don’t.
Penalties and interest
Appeal against a penalty
If you’ve got a reasonable excuse for making a mistake, HM Revenue and Customs (HMRC) will look at your case. If we agree with you, you may not need to pay some or all of the penalty.
Interest on unpaid duty
We’ll charge interest on the whole amount we assess if we make an assessment of duty because:
- you didn’t declare enough duty on a return
- a previous assessment of duty was too low
We’ll apply interest from the date that a return is due to the date you pay the assessed amount.
Paying you interest
If you pay too much duty because of our mistake, we’ll repay you. We’ll also pay interest to you for the applicable period.
Types of penalties
There’s a fixed penalty of £250 if you don’t:
- tell us about a change in the business for example, address
- appoint a fiscal representative
- give security if you’re asked to
- send a return by the due date
- keep or produce accounts
This penalty also applies to a fiscal representative if they don’t tell HMRC about their appointment.
There are 2 types of geared penalty.
5% of duty involved in the offence or £250, whichever is more
We apply this penalty when you don’t pay the full amount of duty you owe by the due date.
Up to 100% of the duty you owe
We apply this penalty if you:
- don’t tell us about your liability to register
- make errors or inaccuracies in returns or documents
- evade duty
We may apply a penalty of up to 30% of potential lost revenue, if we’ve sent you an assessment that’s not enough and you don’t tell us.
Daily penalties apply if you don’t:
- produce records
- pay duty on time
- send a return on time
We’ll issue a daily penalty if we’ve already issued a fixed or geared penalty for the same offence. The daily penalty is £20 a day for each day the offence continues.