CH65040 - Penalties for Failure to File on Time: Other penalty issues: Maximum penalties
A person may incur more than one penalty for failing to file a return on time, but the total of all late filing penalties that are chargeable after 12 months that are calculated as a percentage of the total tax liability from that return must not exceed 100% of the liability to tax for category 1 information. The total late filing penalties that can be charged are higher for category 2 and category 3 information.
The maximum penalties that are calculated as a percentage of the total tax liability are
| Category 1 information | Category 2 information | Category 3 information | |
|---|---|---|---|
| Deliberate and concealed | 100% | 150% | 200% |
| Deliberate but not concealed | 100% | 150% | 200% |
| All other cases | 100% | 100% | 100% |
See CH112300 for guidance on the three categories of information.
For example
Dominic’s total tax liability for his 2014-15 ITSA is £100,000. He incurred the following penalties.
- 6 month further penalty at 5% of £5,000.
- 12 month further penalty at 70% of £70,000, for deliberately withholding, but not concealing, information.
The total tax-geared penalties are 75% of the total tax liability. The above rule provides that the total penalties must not exceed 100% of the total tax liability.
See CH65060 and CH40400+ for guidance on examples about how penalties interact.