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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
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Penalties for Failure to Pay on Time: Rules for specific taxes: Income Tax and Capital Gains Tax (IT & CGT): Penalties: Example

Example of initial and further penalties on an amount of income tax and capital gains tax

Martin delivers his 2011/12 ITSA return showing a balancing payment of £21,000 due on 31 January 2013. But he fails to make any payment. Martin makes some payments at later dates, as shown in the table below.

The due date is 31 January 2013. The penalty date is 31 days after the due date and so is 3 March 2013. The penalties are as follows.

  Payment Unpaid Tax Penalty
       
Amount due at 31 January 2013   £21,000  
Initial penalty of 5% on £21,000 at 3 March 2013      £1,050
Payment 2 May 2013 £5,000 £16,000  
5 month further penalty of 5% on £16,000 at 3 August 2013      £800
Payment 20 September 2013 £10,000 £6,000  
11 month further penalty of 5% on £6,000 at 3 February 2014      £300
Payment 20 February 2014 £6,000 £0  
Total penalty     £2,150