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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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Penalties: Failure to Make a Return for SA Years: Tax Geared Penalties



Penalties under Schedule 55 FA09 for failure to file on time, see CH60000+, apply to income tax and capital gains tax returns for the year ended 5 April 2011 and later years. The returns for the year ended 5 April 2011 are those due to be filed on or before 31 October 2011, or 31 January 2012 if filed electronically.

This page is concerned only with individual SA returns for the year ended 5 April 2010 and earlier, and S93. For partnerships and S93A see EM4585 - though you should be aware that there is no S93A over-12 months tax-geared penalty.

A S93(5) penalty is incurred - subject to reasonable excuse and remedy without unreasonable delay thereafter, EM4563 - when the failure continues after the anniversary of the filing date. It is distinct from and in addition to any penalties imposed under S93(2), (4) or (3).

The maximum penalty is an amount equal to the tax/NICs that would have been shown as payable if a proper return had been delivered on the filing date. That is to say, the S59B “balancing” amount, after deducting any payments on account (whether under S59A or otherwise) and any tax deducted at source.

Being a “maximum-type” penalty,

  • we arrive at the “appropriate” level within the statutory maximum by the abatement exercise, and
  • on appeal, the review officer (after consulting the Authorising Officer) or the tribunal can replace the authorising officer’s judgement of the appropriate amount with their own, TMA70/S100B(2)(b), see EM4506.

TMA70/S59C(4) prevents a surcharge and a tax-geared penalty on the same tax.

If the S93(5) penalty is pursued and surcharge has already been imposed on the culpable duties, it will have to be discharged and any amounts already paid (including interest on late payment of the surcharge) will be repayable or available for set-off. See EM4103.

Where the S93(5) penalty loading would be less than the surcharge and related interest, the surcharge can be left in place and no penalty sought EM6103.