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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: 12 month further penalties: 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+.

If the failure continues 12 months after the penalty date, we need to consider whether, by failing to file the return or document,

  • the person has deliberately withheld information, and
  • the information withheld would enable or assist HMRC to assess the person’s correct tax liability.

This is the only penalty for failing to file a return or other document that considers the person’s behaviour that led to their failure. The amount of the penalty depends on whether the information was

  • deliberately withheld and concealed,
  • deliberately withheld but not concealed, or
  • not deliberately withheld.

Where the person has demonstrated more than one behaviour it is the highest penalty percentage attributable to the behaviours demonstrated that is used to calculate the 12 month further penalty. The nature and quality of a disclosure also affects the penalty percentage where the person deliberately withheld information.

Offshore matters

Higher maximum penalty percentages may apply after 12 months where the outstanding return involves an offshore matter. Currently higher penalties for offshore matters only apply to income tax and capital gains.