DST65300 - Failure to Deliver Return
The Responsible Member is required to submit a DST return to HMRC within 12 months of the end of the accounting period, see DST55000.
A Responsible Member that fails to deliver its DST return by the filing date is liable to penalties under FA20/SCH8/PART9/Paras 52 & 53.
The amount of penalty varies according to how long after the filing date the Responsible Member delivers its DST return. Penalties can be:
- flat-rate, (set out at DST65350 Flat-rate Late Filing Penalties), or
- tax-related (set out at DST65380 Tax-related Late Filing Penalties).
Exemptions
However, a Responsible Member that delivers its DST return after the filing date will not incur a penalty if HMRC have allowed further time for it to deliver the return.
When a Responsible Member does not expect to meet its filing date it may request further time in which to deliver its return. It can make the request at any time before it delivers the return. If HMRC agree to a request for further time, the Responsible Member will not be liable to a penalty if it subsequently delivers its return within the further time allowed.
When considering a request for further time HMRC will apply the ‘reasonable excuse criteria’ set out at DST65320 Reasonable Excuse.
In addition, HMRC (or the Tribunal) have the power to consider a claim that there is a reasonable excuse for the late delivery of a return and the return is delivered as soon thereafter as it reasonably could. When HMRC accepts a claim, a penalty is not charged. Alternatively, HMRC will withdraw, on appeal, any penalty notice.
There will not normally be any partial mitigation of a penalty charged for failure to submit a return on time. These penalties apply automatically once the due date is past.
Assessment of Penalty
HMRC charge penalties incurred under FA20/SCH8/PART9/PARAs 52 & 53 by formal determination. The notice of determination served on the Responsible Member must state the amount of the penalty, the date of issue and the time for which an appeal can be made
The assessment of a penalty is to be treated for procedural purposes in the same way as an assessment to tax and may be enforced as if it were an assessment to tax and can be combined with an assessment to tax (FA20/PART9/S56)
An assessment of a penalty must be made before the end of the period of 12 months beginning with:
- the end of the appeal period for the assessment of the liability to tax which would have been shown in the return, or
- if there is no such assessment, the date on which that liability is ascertained, or it is ascertained that the liability is nil.
Appeal period refers to the period during which:
- an appeal could be brought, or
- an appeal that has been brought has not been determined or withdrawn.
A penalty must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued.
A failure to deliver a return penalty is raised against the Responsible Member and does not attract interest charges.
Appeal
A Responsible Member or agent may appeal against a penalty. Once appealed against the collection of a penalty is postponed. This means that no action can be taken to collect a penalty while it remains under appeal.