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HMRC internal manual

Compliance Handbook

Penalties for Failure to Notify: In what circumstances is a penalty payable: Commencement date

The new failure to notify penalty regime applies where the obligation to notify arises on or after 1 April 2010.

This means the first direct tax periods for which the penalties will apply are as follows.

Tax First direct tax period
Income Tax and Class 4 NIC* 2009-10
Capital Gains Tax 2009-10
Corporation Tax Accounting periods ending on or after 31 March 2010
Diverted Profits Tax Accounting periods ending on or after 31 March 2015

For indirect taxes, the new penalty regime applies where the obligation to notify arises on or after 1 April 2010. The exception to this is the obligation for Landfill Tax under Para 32 Schedule 12 Finance Act 2018 to tell HMRC before 1 May 2018 about a disposal of material that was made, knowingly caused, or knowingly permitted before 1 April 2018, where the material remains at an unauthorised waste site on or after 1 April 2018. This comes into effect from 1 May 2018.

*Class 2 NIC failures are not covered by Schedule 41 but are subject to a similar penalty under Regulation 87A to 87G of the Social Security (Contributions) Regulations 2001. For further guidance, see NIM23008.