Background: typical case examples: company pays late and delivers late
An established company fails to meet its payment and filing obligations on time. It incurs late payment interest (LPI) and the higher flat-rate penalty, before finally meeting its obligations.
The events are numbered in date order, and identified as follows.
- Business event - action taken or arising outside HMRC.
- Automatic event - automatic COTAX action.
- Procedural action - action taken by an operator.
|Order and type of event||Action or actions taken|
|1 Business event||Company AP ends (normal 12 month period).|
Approximately 1 month after the recorded AP ends
|2 Automatic event||COTAX issues a notice to deliver, calculates the filing date (Word 42KB), records the specified period and the issue of the notice to deliver and creates the next AP on the COTAX record.|
Some time later………………
|3 Automatic event||First payment reminder (PR1) issued, 12 days before normal due date (Word 49KB) as no payment or NIL payslip returned to Accounts Office.|
|4 Business event||Payment due date passes with Nil paid.|
|5 Automatic event||Late payment interest starts to run on unpaid tax from the normal due date.|
|6 Automatic event||CT208 combined return and payment reminder issued 28 days before the filing date as no payment or NIL payslip has been received and the return is not yet logged.|
|7 Business event||Filing date passes without receipt of a return.|
|8 Automatic event||COTAX records first flat-rate penalty (F1) stage reached and company incurs flat-rate penalty of £100 or £500 as appropriate.|
|9 Automatic event||14 days later COTAX records first flat-rate penalty (F1) stage charged and issues the first flat-rate penalty.|
|10 Automatic event)||30 days later COTAX issues a payment application for the penalty.|
Some time later………………
|11 Business event||Filing date + 3 months + 1 day passes without receipt of a return.|
|12 Automatic event||COTAX records second flat-rate penalty (F2) stage reached and flat-rate penalty increases to £200 or £1000 as appropriate.|
|13 Automatic event||14 days later COTAX records second flat-rate penalty (F2) stage charged and issues the second flat-rate penalty.|
|14 Automatic event||30 days later COTAX issues a payment application for the penalty.|
|15 Business event||Return received late, but before the tax-related penalty stage reached.|
|16 Automatic event||COTAX automatically captures the details and records the self assessment.|
|17 Business event||Full payment received at Accounts Office to settle the unpaid CT, late payment interest and penalties.|
|18 Automatic event||COTAX posts interest charge, as further interest accrual stops when full payment is received.|