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HMRC internal manual

Compliance Handbook

Charging penalties: interaction between penalties: details and examples: a failure to notify penalty is payable and a penalty under FA1994/S9 was incurred

FA08/Sch41/Para15(2) requires that a failure to notify penalty must be reduced by a penalty incurred under Section 9 of the Finance Act 1994, see Excise Civil Penalties, for a failure to comply with a relevant obligation. A relevant obligation is a requirement to notify to be approved, registered or licensed within an excise regime.

If an FA94/S9 penalty has been assessed, the FA08/Sch41 penalty must be reduced.

If an FA94/S9 penalty has not already been assessed, you should charge the Schedule 41 penalty only.

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


Barry is discovered operating an illegal betting business from an industrial unit. A duty assessment of £10,000 is raised and also a £250 penalty is assessed under FA1994/S9.

You subsequently establish that Barry is liable to a 50% penalty under FA08/Sch41 for his deliberate failure to notify his liability to register for betting duty.

You assess the FA08/Sch41 penalty in the amount of £5,000 less the £250 FA1994/S9 penalty.

FTN penalty 50% of £10,000 £5,000
Minus the FA1994/S9 penalty liability £250
Adjusted FTN penalty £4,750

If an FA1994/S9 penalty has not already been assessed, you will raise the Sch41 penalty assessment only, in the amount of £5,000.