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HMRC internal manual

Compliance Handbook

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: 6 month further penalties

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 6 month further penalty if the return or other document remains outstanding 6 months after the penalty date, see CH61160.

Example

Flora has not filed her 2013-14 ITSA return. The filing date is 31 January 2015. The penalty date is 1 February 2015. Flora incurred an initial fixed penalty of £100 on 1 February 2015. We charged daily penalties from 1 June 2015 for 90 days. Flora is liable to a 6 month further penalty on 1 August 2015.

The 6 month further penalty is the greater of

  • 5% of the liability to tax that would have been shown in the return, and
  • £300.

The ‘liability to tax that would have been shown in the return’ is the net liability to tax for the year, taking into account tax deducted at source. It is not reduced by any amount that has been paid towards that liability.

See CH63560 for how to quantify a tax-geared penalty when the return has not been filed.

A person becomes liable to a 6 month further penalty even if we have not charged daily penalties after 3 months, see CH62120.

The 6 month further penalty differs from the 12 month further penalty, see CH62160+, because the 6 month further penalty

  • has no reduction for disclosure, and
  • does not depend on the type of behaviour.

See CH62900 if the outstanding return relates to a partnership.

FA09/SCH55/PARA5