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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Penalties for Failure to File on Time: Calculating the penalty: Calculation process: Calculating the 6 month further penalty

To calculate the 6 month further penalty, you multiply the tax liability that would have been shown in the return by the penalty percentage, and then check that this amount is greater than the minimum penalty amount. The penalty percentage is always 5% for the 6 month further penalty.

The following process applies where the failure to file continues for 6 months. There is no ability to reduce the penalty percentage if the person makes a disclosure, see CH63120.

Step 1

To arrive at the amount of the penalty (a), multiply the liability to tax (b) that would have been shown in the return by 5%.

(a) = (b) x 5%

Step 2

Ensure that the calculated penalty (a) is greater than the £300 minimum penalty. If (a) is less than £300, then the penalty is £300.