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HMRC internal manual

Compliance Handbook

Charging penalties: introduction: penalties for failure to file returns on time - FA09/Sch55: higher 12 month penalty for deliberate withholding of information - action needed

Note: The guidance on this page does not apply to PAYE Real Time Information (RTI) returns because there are no 12 month further penalties for outstanding PAYE RTI returns, see CH401255 and CH401260 for guidance on when and how to charge manual penalties for late RTI returns.

You need to gather evidence to charge a further penalty for a 12 month failure to file and deliberate withholding of information, see CH402254.

You need to evaluate the evidence to decide whether or not it is sufficient to support the penalty, see CH402705.

The penalty must be

  • entered into the National Penalties Processing System (NPPS), see CH407500 and Caseflow.
  • athorised through the National Penalities Procesing System (NPPS), see COG90840.
  • charged manually where it is not possible to issue a penalty assessment using NPPS, see CH407900.

You must make an adjustment to the penalty to deduct the automatically assessed 12 month failure to file penalty, see CH403321.

Where the penalty exceeds 95% of the liability to tax (after the reduction for the 12 month automatic penalty), you will have to make another adjustment so that the total of the 6 month and 12 month tax-geared penalties does not exceed 100% of the tax liability, see CH404475.

If you receive a case where a return is more than 12 months overdue and you have third party information about a tax liability, you should consider asking DMB to make a determination, see CH401225.