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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Agent operation guidance: dishonest tax agents: penalties: daily penalties

You can charge daily penalties after the initial £300 penalty has been charged, if the document-holder still does not comply, see CH183380.

The aim in assessing penalties is to encourage the person to provide the outstanding documents.

You must consider assessing daily penalties 30 days after an initial penalty has been charged and each 30 days thereafter. This will

  • encourage the person to comply with the notice
  • prevent even a modest daily penalty giving rise to a single substantial demand.

Before you assess a daily penalty you must review the case with your manager and try to make contact with the person to whom you sent the notice to see if you can help them to comply.

You must get written authority from your manager to assess daily penalties.

You can assess a daily penalty of up to £60 for each day that the failure continues after the initial penalty was charged. Daily penalties would be inappropriate where the document no longer existed because it had been destroyed.

In the majority of cases a penalty at the lower end of the range will be sufficient for a first assessment of daily penalties. However, where appropriate, you must consider a higher amount up to the maximum.

When you are deciding the level of daily penalty you will need to consider the

  • extent of the dishonest conduct
  • amount of tax that appears to be at stake
  • nature and extent of the documents requested
  • problems facing the person in getting all the documents
  • degree of cooperation given to date.

You must fully record the basis on which you have arrived at the amount of the daily penalty because you may need to justify it before the tribunal if the person appeals.

Daily penalties start from the day after the initial penalty was charged. You will calculate them up to a date not later than the last working day before the daily penalty assessment is made.

You must not assess any daily penalties once the notice has been complied with.

Example

Sam was charged an initial penalty of £300 on 20 August 2013 for not providing documents to you. On 20 September 2013, as he has still not provided the documents, daily penalties for the previous 30 days at £20 for each day are assessed. On 2 October 2013 Sam provides the documents. No penalty is imposed for the last period of non-compliance, 20 September to 1 October inclusive.

CH185060 explains the time limits within which you must issue a penalty assessment.

Details of how to create the penalty charge are at CH883810.

When you assess the penalty, you must send the person a

  • Notice of assessment.
  • Payslip generated through Print Payslip using the SAFE charge reference. If you do not have access to a stand-alone printer use manual payslip PS1(BZ) and enter the SAFE charge reference by hand.

You should send a copy of the file access notice with your penalty notice, marking the copy to show what you still need the person to provide.

A daily penalty notice (TA8) is available in SEES Forms and Letters.

A person can appeal against the imposition and the amount of daily penalties for failing to comply with a file access notice, see CH185260.

If you have referred your case to the Commissioners’ Advisory Accountant (CAA) you must tell the CAA team about a penalty charged on the tax agent, see CH881600.

If money laundering issues arise, or you have already reported an agent to Anti-Money Laundering Supervision (AMLS), see CH881150.