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HMRC internal manual

Compliance Handbook

Penalties for Inaccuracies: Other penalty issues: Interaction with other penalties and surcharges: More than one penalty/surcharge on the same tax

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

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 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 will be governed by practical considerations. Note that where there is a penalty under FA07/SCH24 which could be suspended, that penalty should be considered last.

Where the same inaccuracy gives rise to penalties on more than one person the aggregate penalties are not to exceed 100% of the PLR. See CH84974.

You cannot reduce a penalty for an inaccuracy below zero.

For operational guidance and examples, please see CH404000.