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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Penalties for Failure to Pay on Time: Rules for specific taxes: Bank Payroll Tax (BPT): Penalties: Example

Example of initial and further penalties on an amount of Bank Payroll Tax.

Secure Bank Ltd delivers a return showing it is due to pay £450,000 of Bank Payroll Tax on 31 August 2010, but it fails to make the payment. The company makes some payments at later dates, as shown in the table below.

The due date is 31 August 2010. The penalty date is 1 September 2010. The penalties are as follows.

  Payment Unpaid BPT Penalty
       
Amount due at 31 August 2010   £450,000  
Initial penalty of 5% on £450,000 at      
1 September 2010     £22,500
Payment 1 December 2010 £300,000 £150,000  
5 month further penalty of 5% on £150,000 at      
1 February 2011     £7,500
Payment 1 July 2011 £100,000 £50,000  
11 month further penalty of 5% on £50,000 at      
1 August 2011     £2,500
Total penalty     £32,500