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HMRC internal manual

Claimant Compliance Manual

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HM Revenue & Customs
Updated
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Closing the enquiry: time limits for penalties: examples

If the time limit for penalties has expired a penalty determination can no longer be considered.

Example 1

The customer returns her S17 end of year declaration to finalise her 2010/11 award on 16 June 2011. An enquiry is opened on 15 October 2011. The enquiry is completed and a decision notice issued on 5 July 2012.

The enquiry window would have closed on 30 September 2012 (one year after the first specified date) so the time limit for penalties is one year after this date on 30 September 2013.

Example 2

The customer returns her S17 declaration for 2009/10 on 30 June 2010. An enquiry is opened on 3 January 2011 and completed when a decision notice is issued on 14 November 2011.

The enquiry window would have closed 12 months after the first specified date, on 30 September 2011 So the time limit for penalties will be the later of 12 months after this date or 14 November 2012 (12 months after the issue of the decision notice). In this example therefore a penalty notice must be issued before 14 November 2012.

Example 3

The customer returns his S17 declaration for 2009/10 on 2 May 2010 but includes an estimate of his income for the year to 5 April 2010. He provides actual income figures from his P60 on 20 January 2011 and a final decision is made on his award on the same date. An enquiry is opened on 3 March 2011 and completed with the issue of a decision notice on 9 December 2011.

The enquiry window would have closed on 31 January 2012 (one year after the second specified date) so a penalty notice must be issued before 31 January 2013 (as this is later than the 12-month anniversary of the decision notice).

Example 4

A customer, who is also an SA taxpayer, submits her 2009/10 S17 declaration on 20 May 2010 and the award is finalised on this date. An NTC enquiry is opened on 20 June 2010 and completed on 3 November 2010.

In an SA case the NTC enquiry window runs from the day after the S18 decision is made until 12 months after the second specified date, which in this case is from 21 May 2010 to 31 January 2012. The time limit for penalties will be the later of 31 January 2013 or 3 November 2011 (12 months after the decision notice). The penalty notice must therefore be issued before 31 January 2013.