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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
, see all updates

Penalties for failure to file on time: types of penalties for failure to file on time: occasional returns and returns for periods of 6 months or more: overview

This page currently only applies to returns required for income tax, capital gains tax, bank payroll tax, the registered pension schemes legislation, annual tax on enveloped dwellings and stamp duty reserve tax. It does not apply to the Construction Industry Scheme (CIS), see CH62300+.

A person is liable to a penalty when they fail to file their return or other document by the filing date. The penalty date is the day after the filing date. They become liable to further penalties where their return remains outstanding for 3, 6 and 12 months from the penalty date. After 12 months from the penalty date, the amount of penalty also varies depending on the reason for the failure and whether the information withheld would enable or assist HMRC assessing the person’s correct tax liability. Higher maximum penalty percentages may apply after 12 months where the outstanding return involves an offshore matter, see CH62260+.

The penalties are summarised in the table.

When liable to penalty Type of penalty Amount of penalty Guidance
       
On the penalty date Initial fixed penalty Fixed £100 CH62100
3 months after the penalty date Daily penalties £10 per day, up to a period of 90 days CH62120
6 months after the penalty date 6 months further penalty Greater of  

5% of the tax liability that would have been shown in the return, and

£300 CH62140    
  12 months after the penalty date 12 month further penalty If withholding of information is deliberate and concealed, greater of

100% of the liability that would have shown in the return, and

£300

If withholding of information is deliberate but not concealed, greater of

70% of the liability that would have shown in the return or document, and

£300

If withholding of information is not deliberate, greater of

5% of the liability that would have shown in the return or document, and

£300 CH62160+

See the diagram (Word 29KB) of the penalties for occasional returns and returns for periods of 6 months or more.

Any late filing penalties that have been charged will be cancelled where we agree to withdraw the notice to file a self assessment tax return, see CH61700.

Note that after a return or other document is outstanding for 12 months, a person can demonstrate more than one behaviour regarding information in that return or document. The penalty is calculated using the highest penalty percentage that is applicable, see CH62200.

The person can receive a reduction to the 12 month 100% or 70% penalty if they make a disclosure, see CH63100+. But, we cannot reduce the 12 month 5% penalty for a disclosure.

FA09/SCH55

FA10/SCH1/PARA38