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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: penalties: class 1A NIC incorrect form P11D(b) - pre April 2011

Regulation 81(1) Social Security (Contributions) Regulations 2001

This provides a NICs geared penalty for fraudulently or negligently submitting an incorrect form P11D(b) - COG914085.

The maximum penalty before abatements is an amount equal to the difference between the Class 1A NICs returned and the Class 1A NICs which should have been returned.

For example, a form P11D(b) which returns £5,000

  • where it is later demonstrated that
  • £9,000 of Class 1A NICs should have been returned
  • attracts a maximum penalty before abatements of £4,000.

Note that these penalties are based on 100% of the tax/NICs difference or the tax/NICs underpaid and are subject to Article 6 of ECHR COG906050 - Human Rights Act 1998 (HRA) - Background.

You should

  • provide HRA advice and
  • issue factsheets CC/FS7a and CC/FS19

to the employer at the earliest opportunity COG906060 - penalties - when to issue.

If it has been necessary to issue formal decisions consideration should be given to issuing penalties at the same time COG914175 - formal action.

See Section 8 NICs Decision - COG915155.