HMRC internal manual

Compliance Handbook

CH403322 - Charging penalties: calculating penalties: adjustment of a failure to file penalty for an amount charged automatically: adjustment where 6 and 12 month penalties exceed 100% of the duty

If you establish a penalty for failure to file and deliberate withholding of information that is more than 95% of the liability to tax after the reduction of the 5% 12 month automatic penalty, see CH403321, you will have to make a further adjustment in NPPS.

This is because, without an adjustment, the 6 month and 12 month tax-geared failure to file penalties would exceed 100%, which FA09/Sch55 does not allow.

Guidance on making adjustments to penalties in the NPPS is at CH407720.

There is an example of this type of penalty interaction at CH404475.