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HMRC internal manual

Enquiry Manual

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HM Revenue & Customs
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Penalties: Failure to Comply with SA Information Notices: Penalty Determinations - Initial Penalty

This guidance only applies to information notices issued on or before 31 March 2009.

After 31 March 2009 you cannot issue notices under TMA70/S20, TMA70/S19A, FA98/SCH18/PARA27 or TMA70/SCH1A/PARA6. You must instead use the information powers in FA08/SCH36, see CH20000+

TMA70/S97AA

FA98/SCH18/PARA 29

The authorised officer, see EM5320+ and EM4702 for the initial £50 S97AA(1)(a) penalty or the initial £50 Para 29(1)(a) penalty is any Team Leader at Higher Officer Grade or any officer above that grade.

There must be evidence available within your papers to show that the proposed penalty action has been considered and approved by the ‘authorised officer’. The penalty is fixed at £50 and must not therefore be imposed in any lower figure.

The initial penalty determination should be made using LFC form

  • SA521 for SA taxpayers
  • SA580 for companies.

You will need to select the type of penalty to be imposed. LFC will then automatically insert the appropriate words in the details space. The amount of the penalty is, in every case, £50 and the details in square brackets should be omitted where the notice concerns only documents.

You should issue the SA521/SA580 with a covering letter to the taxpayer

  • referring to your previous correspondence
  • saying that you are enclosing a formal notice imposing a penalty
  • enclosing a payslip (in CT cases this will need to be produced by the SAFE Nominee locally by pasting and copying the charge reference number from SAFE into the ‘Print Payslip’ application), and
  • reminding the taxpayer that if the failure continues, you will consider the imposition of daily penalties.

If the penalty is in respect of a failure to comply with a S19A notice for a partnership enquiry, explain this to the taxpayer. This avoids any confusion between penalties for the representative partner failing to comply with a S19A notice in respect of the partnership enquiry and any enquiry on the partner’s individual tax return.

Issue a copy of your letter to the agent if there is one and keep a copy of the letter and SA521/SA580 in your papers.

Notifying the Penalty for Recovery

For SA cases

  • Include the penalty on the taxpayer’s statement of account using ‘Create Sundry Charge’. In the charge due date field enter the due and payable date for the penalty. This will be 30 days from the date of issue of the penalty notice in accordance with Section 100A(2) TMA.

For CTSA cases

  • Although the penalty charge will be raised in LFC it will be collected via SAFE under the charge type ‘394 CT Penalty’. The SAFE Nominee must raise the penalty charge on SAFE based on the details shown on the SA580.

TMA70/S19A(3)(b)

TMA70/Sch1A/para 6(3A)(b)

FA98/Sch18/para 27(3)(b)

Where exceptionally the failure relates to a notice requiring the taxpayer to produce the original of a document or documents for inspection then the LFC wording will not be correct. In that case use the 394 word template, see EM5252. Replace the reference to Section 19A(2) etc with the appropriate reference above.