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HMRC internal manual

Compliance Handbook

Penalties for failure to file on time: how to process a penalty: overview

Once a person has become liable to a penalty for a failure to file on time we will either

  • send them a penalty assessment, or
  • when we can, for direct tax, consider including it in an agreed contract settlement for the tax, any interest and the total of all the penalties that are due - see EM6000 for further guidance.

Either way, we will tell the person

  • how we calculated the penalty
  • what they owe, and
  • when and how they must pay it.

There are time limits to issue a penalty assessment, see CH64200. The enforcement rules that apply to the tax for a specific tax regime also apply to the penalty assessment and so the penalty is enforceable in the same way as an assessment to tax.

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 CH64280.