Multinational Top-up Tax and Domestic Top-up Tax

MTT50210 - Administration: Administration of Domestic Top-up Tax - Penalties

The MTT penalty regime is replicated for DTT purposes. This is necessary because wholly domestic groups and entities will not be in scope of MTT.

Additionally, some penalties are tax-geared. The MTT and DTT liabilities will not overlap, so the penalty will need to be charged in respect of both taxes to ensure that the tax-geared element is charged on the aggregate liability.

This is set out in paragraph 6, schedule 18 to Finance (No.2) Act 2023.

Example

The filing member of a group has submitted a self-assessment return one week late. The self-assessment return contains information relating to both MTT and DTT.

The filing member will be charged a £100 penalty in respect of each of the taxes (see MTT55440).

Another multinational group submits its self-assessment return eight months late. It is necessary to charge a penalty in respect of both MTT and DTT because the penalty may be tax-geared.