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HMRC internal manual

Compliance Handbook

Penalties for Inaccuracies: How to Process the Penalty: Suspension of a penalty: Suspension conditions: Direct tax example

You must check the date from which these rules apply for the tax or duty you are dealing with. See CH81011 for full details.

We charged Hugh a penalty of £2,500 in respect of a careless inaccuracy in his form CIS300. On 1 September 2010 we suspended this penalty for 4 months, subject to the following conditions.

  • By 31 December 2010 Hugh will make sure that procedures are put in place to ensure that the CIS300 is correctly completed and the declaration is correct by

    • checking that payments to subcontractors have not been made under contracts of employment
    • checking that every subcontractor on the return has been verified by HMRC, and
    • ensuring that the correct amount of CIS deductions is accounted for in respect of the subcontractors he engages.
  • Hugh must also send HMRC all the returns required to be made during the suspension period by the appropriate due date.

The first condition is a specific condition. The second is the generic condition. Although only the first condition will help Hugh avoid becoming liable to future penalties for careless inaccuracy, at the end of the suspension period he must satisfy us that he has complied with both conditions otherwise the penalty will become payable.