MLR1PP15120 - Type 4 penalties (failure to provide information or access)

Type 4 penalties apply where a business fails to provide HMRC with information that they have been asked for and / or fails to attend a meeting previously specified, and / or declines to let HMRC access their business premises. (This content has been withheld because of exemptions in the Freedom of Information Act 2000) The requests relate to:

• regulation 66 of the regulations a power to require information
• regulation 69 of the regulations a entry, inspection of premises without a warrant etc.

Unlike penalties in types 1, 2 and 3, type 4 penalties do not attract any discounts, including for prompt payment.

Penalties under type 4 increase with the time taken to comply and the number of occasions that a business refuses to do so.

Where a business fails to provide information, HMRC have the option to issue a Regulation 66 Notice, requesting documents. The business then has a specified period of time in which to comply with the notice. Non-compliance attracts a £1,000 penalty on the first day beyond the deadline. This then increases by £60 for each further day that the notice is not complied with. Then, on the 30th day, a further £1,000 fine is also levied taking the total to £3,740. i.e.

£1,000 + (29*60) + £1,000 = £3,740

On day 30, beyond the date of the Notice, the business must comply with the original Notice, as well as pay the penalty immediately, or potentially face further sanctions.

Where a business denies entry to a premise, a Regulation 69 can be issued. If the business fails to comply with the Regulation 69 Notice, the business will be liable for either a £5,000 initial penalty and / or other sanctions. If access is again denied when HMRC returns for a second visit, there will be an additional penalty of £5,000 making a total of £10,000 and / or any other sanctions instigated.

Similarly, a Regulation 66 Notice can request for the business to attend a meeting with the duly authorised officer, at a specified time. If the business fails to comply with a Regulation 66 Notice to attend a meeting, the business will be liable for either a £5,000 initial penalty and / or other sanctions. If attendance is again not completed on a second attempt, there will be an additional penalty of £5,000 making a total of £10,000 and / or any other sanctions instigated.