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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: Annual Tax on Enveloped Dwellings (ATED): penalties: examples

Example of initial and further penalties on an amount of Annual Tax on Enveloped Dwellings (ATED)

Example 1 - Amount due during the relevant year

T Limited delivers its 2014-15 return on 30 April 2014, showing £35,900 of ATED due that date. But it fails to make any payment. T Limited makes some payments at later dates, as shown in the table below.

The due date is 30 April 2014. The penalty date is 31 days after the due date and so is 31 May 2014. The penalties are as follows.

  Payment Unpaid Tax Penalty
       
Amount due at 30 April 2014   £35,900  
Initial penalty of 5% on £35,900 at 31 May 2014     £1,795
Payment 10 June 2014 £15,900 £20,000  
5 month further penalty of 5% on £20,000 at 31 October 2014     £1,000
Payment 1 December 2014 £10,000 £10,000  
11 month further penalty of 5% on £10,000 at 30 April 2015     £500
Payment 12 May 2015 £10,000 £0  
Total penalty     £3,295

Example 2 - Amount due after the end of the relevant year

S Limited delivers its 2014-15 return of adjusted chargeable amount on 30 April 2015, showing £35,000 of ATED due on 30 April 2015. But it fails to make any payment. S Limited makes some payments at later dates, as shown in the table below.

The due date is 30 April 2015. The penalty date is 31 days after the due date and so is 31 May 2015. The penalties are as follows.

  Payment Unpaid Tax Penalty
       
Amount due at 30 April 2015   £35,000  
Initial penalty of 5% on £35,000 at 31 May 2015     £1,750
Payment 20 June 2015 £15,000 £20,000  
5 month further penalty of 5% on £20,000 at 31 October 2015     £1,000
Payment 1 January 2016 £10,000 £10,000  
11 month further penalty of 5% on £10,000 at 30 April 2016     £500
Payment 24 May 2016 £10,000 £0  
Total penalty     £3,250