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HMRC internal manual

Compliance Handbook

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Penalties for Failure to Pay on Time: Rules for specific taxes: Registered Pension Scheme (RPS): Penalties: Example

Example of initial and further penalties on an amount of income tax due under the Registered Pension Scheme.

Reliable Pensions delivers their return for the 3 months ended 30 June 2013 showing it is due to pay £1,200,000 of income tax due under the Registered Pension Scheme on 14 August 2013. But it fails to make any payment. Reliable Pensions makes some payments at later dates, as shown in the table below.

The due date is 14 August 2013. The penalty date is 14 September 2013. The penalties are as follows.

  Payment Unpaid Tax Penalty
       
Amount due at 14 August 2013   £1,200,000  
Initial penalty of 5% on £1,200,000 at      
14 September 2013     £60,000
Payment 20 September 2013 £800,000 £400,000  
5 month further penalty of 5% on £400,000 at      
14 February 2014     £20,000
Payment 20 March 2014 £300,000 £100,000  
11 month further penalty of 5% on £100,000 at      
14 August 2014     £5,000
Payment 20 August 2014 £100,000 £0  
Total penalty     £85,000