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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
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Dishonest tax agents: how to process a penalty: time limits for assessing penalties

The time limit for issuing an assessment for a penalty depends on which penalty is being assessed.

Initial and daily penalties for failing to comply with a file access notice
Penalty for dishonest conduct

Initial and daily penalties for failing to comply with a file access notice

You can assess an initial penalty for failing to comply with a file access notice within 12 months from when the person first became liable to the penalty. The person first became liable to the initial penalty on the day after the date on which the documents should have been provided, see CH183335.

Daily penalties must also be assessed within 12 months from when the person became liable to the penalty. The person became liable to daily penalties the day after the day on which the person was charged the initial penalty.

See CH185070 for an example.

Penalty for dishonest conduct

You can assess a penalty for dishonest conduct within 12 months from the later of date one and date two.

Date one

Date one is the first day on which we may assess the penalty. This date is after a conduct notice has been issued, and

* the time allowed for giving notice of appeal against the determination has expired without notice of appeal being given, or
* a notice of appeal against the determination was given within the time allowed, but the appeal has been withdrawn or the determination confirmed.

Date two

Date two depends on whether a loss of tax revenue results from the dishonest conduct.

If a loss of tax revenue results from the dishonest conduct, date two is

* the day after the end of the ‘appeal period’ for the assessment, or determination of the tax revenue lost, or if more than one client is involved, the end of the last such period, or
* if there is no such assessment or determination, the day on which the amount of tax revenue lost is ascertained.

If no loss of tax revenue results from the dishonest conduct, then date two is the day on which we decide that no loss of tax revenue results.

The ‘appeal period’ is the period in which

  • an appeal could be made, or
  • an appeal has been made, and the end date of that appeal period is when the appeal is withdrawn or determined.

See CH185070 for an example.

FA12/SCH38/PARA30