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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: Returns for periods between 2 and 6 months: 12 month further penalties: Behaviour

This page currently only applies to returns required for machine games duty (MGD).

A person is liable to a 12 month further penalty if the return or other document remains outstanding after 12 months from the penalty date, see CH61160.

Example

Magnolia LLP was due to file its MGD return for the 3 months ended 31 January 2014 on 2 March 2014, being 30 days after the end of the accounting period. However 2 March 2014 is a Sunday, and so the return is due on the last working day before that day. Therefore, the return is due Friday 28 February 2014. Magnolia LLP incurred an initial fixed penalty on 1 March 2014 and a 6 month further penalty on 1 September 2014.

The return is still not filed 12 months after the penalty date and so Magnolia LLP is liable to a 12 month further penalty on 1 March 2015.

The amount of the 12 month further penalty takes into account the behaviour of the person and whether, by failing to deliver the return or other document by the filing date, the person deliberately withheld information that would enable or assist HMRC to assess their tax liability.

Information deliberately withheld

If, by failing to make a return, the person deliberately withholds information, the withholding of that information is either

  • ‘deliberate and concealed’ if the person deliberately withholds information and makes arrangements to conceal the fact that the information has been withheld, or
  • ‘deliberate but not concealed’ if the person deliberately withholds the information but does not make arrangements to conceal the fact that the information has been withheld.

Information not deliberately withheld

If, by failing to make a return, the person does not deliberately withhold information the failure is still subject to a penalty that is the greater of

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

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.

Without further information about why the return or other document was not filed 12 months after the filing date, the person will be liable to a 5% penalty. We will increase the percentage of the penalty if enquiries establish that the person deliberately withheld information.

See CH62770 for examples of

  • deliberate but not concealed, and
  • deliberate and concealed.

See CH62780 for details of the penalties that apply where the person withholds information.

A person can receive a reduction to the 12 month further penalties, where they had deliberately withheld information, if they make a disclosure, see CH63100+. But, we cannot reduce the 12 month 5% penalty for a disclosure.

FA09/SCH55/PARA6

FA09/SCH55/PARA27