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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Penalties for failure to file on time: types of penalties for failure to file on time: penalties involving partnerships: income tax and capital gains tax

If the outstanding return relates to a partnership, the way in which the penalty is calculated and assessed depends on the tax to which the return relates.

Partnership returns for income tax (IT) and capital gains tax (CGT)

This guidance applies only to a partnership return, that is a return made by a partnership following a notice under TMA70/S12AA(2).

For IT and CGT a partnership is not a person in its own right and therefore it does not have a liability to tax. The liability to tax arises on the individual partners based on their share of the partnership profits shown on the partnership return.

Because a partnership return does not have a tax liability we cannot charge a partnership with a tax-geared penalty for failing to file a partnership return. We also do not charge the fixed amount penalties on the partnership. Each relevant partner is liable to the penalty.

When each partner becomes 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    
       
£300 CH62140    
12 months after the penalty date 12 month further penalty    
       
£300      
CH62160+      

Note that we charge the penalties on all the relevant partners, not the partnership. A relevant partner means a person who was a partner in the partnership to which the return relates at any time during the period covered by the partnership return.

If, for example, there were five relevant partners, and the representative partner failed to submit the partnership return by the penalty date, each partner would be liable to an initial £100 penalty.

Even though we assess the penalties on the relevant partners it is only the representative partner (or successor) who has the right of appeal, see CH64540.

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.

See CH64000+ for technical guidance on processing a penalty.

FA09/SCH55/PARA25