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HMRC internal manual

Compliance Handbook

Penalties for failure to notify: Other penalty issues: Interaction with other penalties: More than one penalty on the same tax

A person can incur more than one penalty on the same liability to tax.

For example, a person could be responsible for all or a combination of

  • failing to notify a chargeability and incurring a penalty under FA08/SCH41, and
  • being issued with a return but submitting it late and incurring a penalty under FA09/SCH55, and
  • including an inaccuracy in the return and incurring a penalty under FA07/SCH24.

Or a person may be liable to an SA surcharge or a VAT default surcharge for late payment of some or all of the same tax.

In certain circumstances we reduce the amount of one or more of those penalties so that ultimately the penalty percentage charged on that common tax liability does not exceed the highest percentage that is chargeable for one of those offences.

The order in which we make reductions is governed by practical considerations. Note that where there is a penalty under FA07/SCH24 which could be suspended, that penalty should be considered last.

For operational guidance and examples, see CH404000.

You cannot reduce a penalty for failure to notify below zero.

FA08/SCH41/PARA15 (1)