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HMRC internal manual

Self Assessment Manual

HM Revenue & Customs
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Interest, penalties and surcharge: penalties: daily penalties: consider raising a

This guidance refers to tax returns received for 2009-10 and earlier. For further information regarding the new rules for the tax years 2010-11 and later, see SAM61200 onwards.

Where a return has not been filed by the filing date SA legislation allows for the Department to seek a direction for daily penalties by Tribunal. Once that direction has been given we may impose daily penalties at a rate not exceeding £60 per day. In partnership cases up to £60 per day may be imposed on each partner. Such action should only be undertaken with the approval of the authorised officer (see IH8304) who should also set the daily rate when approving action.

But as a general rule it would be exceptional to raise daily penalties without having firstly considered raising a Revenue determination. Consider seeking daily penalties where

  • Very large amounts of tax are at risk


  • 2 or more returns are still outstanding and determinations have been made


  • There are particular pressing reasons for requiring early submission of the return


  • There has been persistent failure to submit a particular return


  • In partnership cases, the returns of all the individual partners have been filed, and any amounts due (including penalties) from the individual partners have been paid or are the subject of enforcement action


  • In PAYE cases, two or more returns are outstanding and there is no basis for raising a determination

Some of these cases will be selected by the office responsible for Technical work in the normal course of day to day work on the basis of information received. Officers in the Recovery Office will also identify cases.

All cases need to be reviewed critically and a decision made whether or not they are appropriate for daily penalty action before the approval of the authorised officer.

Where a case has been sent to Tribunal to seek a direction for daily penalties, the office responsible for Technical work should set the Record Daily Penalties signal using the function AMEND FIXED PENALTIES. (See subject ‘Daily Penalties: Procedures for Applying’ (SAM61090) for further details about applications for daily penalties and subject ‘Fixed Automatic Penalties: Automatic Imposition of’ (SAM61020) for details of when the second fixed penalty is charged).

Note: Where this signal is present on the taxpayer’s record no further fixed automatic penalties will be charged (including the first penalty if this has not yet been imposed) - although those already charged will remain.

Record daily penalties on the taxpayer’s record using IDMS function RAISE DAILY PENALTY. If you need to amend the figure at a later date use SA function MAINTAIN SUNDRY CHARGE and advise the taxpayer.