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HMRC internal manual

Self Assessment Manual

From
HM Revenue & Customs
Updated
, see all updates

Interest, penalties and surcharge: penalties: manually raising and amending a penalty (Action Guide)

Where a penalty needs to be raised manually, follow steps 1 - 10 below. To amend a manually raised penalty, follow steps 11 - 15 below.

The guide is presented as follows

  Steps 1 - 3
   
   
Return is not filed 30 days after daily penalties have started to accrue Steps 4 - 5
Return is not filed 60 days after daily penalties have started to accrue Steps 6 - 7
  Steps 8 - 10
  Steps 11- 15

Late filing fixed penalties, late filing taxed geared penalties and late payment penalties

1. From the user role function menu in the ‘Statements’ area
   
  * Enter the taxpayer reference
  * Select ‘Create Sundry Charge’
  * In the ‘Year Ending 5 April’ field, enter the year that the penalty relates to
  * In the ‘Charge Due Date’ field, enter the due date of the penalty. Note: This will be 37 days from the date of creation
  * Show the charge type as ‘Manually Raised Miscellaneous Penalty’
  * In the ‘IT’ field, enter the amount of penalty. Do not make any entries in the NIC or CGT fields
2. For late filing fixed penalties
  * Prepare and issue the SEES letter SA326D (for individuals/trusts) or SA328D (for partnerships)
  For late filing tax geared penalties or late payment penalties
  * Prepare and issue the SEES letter SA370 (for individuals/trusts) or SA371 (for partnerships)
  For all cases
  * Send a copy of the letter to the agent where the 64-8 signal is set
  * Print a copy of the SA370 or SA371 notes from the HMRC website and send with the customers copy
  * Send payslip PS1(BZ) with customers copy
3. Make an SA Note on the customers record

Late filing daily penalties

  Where daily penalties are accruing and the return is not filed 30 days after daily penalties have started to accrue follow steps 4 - 5 below
   
  Note: Daily penalties start to accrue if the return is not filed 3 months after the return due date
4. Prepare and issue the SEES letter SA372-30 (for an individual/trust) or SA373-30 (for a partnership). A copy of the letter is not sent to an agent, if one is acting
5. Make an SA Note on the customers record
  Where daily penalties are accruing and the return is not filed 60 days after daily penalties have started to accrue. Follow steps 6 and 7 below
6. Prepare and issue the SEES letter SA372-60 (for an individual/trust) and SA373-60 (for a partnership). A copy of the letter is not sent to an agent, if one is acting
7. Make an SA Note on the customers record

Daily penalties have ceased to accrue

  Where daily penalties have ceased accruing, either because the return has been logged or the 90 day accruing period has ended, a daily penalty charge is to be raised, follow steps 8 - 9 below
   
  For example, if the return is outstanding 90 days after daily penalties have started to accrue, the charge will be £900 (90 x £10). For examples see SAM61230 
8. Create a Miscellaneous penalty charge using function CREATE SUNDRY CHARGE
  * In the ‘Year Ending 5 April’ field, enter the year that the penalty relates to
  * In the ‘Charge Due Date’ field, enter the due date of the penalty. Note: This will be 37 days from the date of creation
  * In the ‘IT’ field, enter the amount of the penalty. Do not make any entries in the NIC or CGT fields
  Note: The due date of the penalty is 37 days ,which is 30 days to appeal and 7 days allowed for printing and dispatch
9. Prepare and issue the SEES letter SA370 (for individuals/trusts) or SA371 (for partnerships)
  * Send a copy of the letter to the agent where the 64-8 signal is set
  * Print a copy of the SA370 or SA371 notes from the HMRC website and send with the customers copy
  * Send payslip PS1(BZ) with customers copy
10. Make an SA note on the customers record

Amend a manually raised penalty

11. From the user role function menu in the ‘Statements’ area
   
  * Enter the taxpayer reference and select ‘View Statement’
12. Select the statement on which the penalty is shown. Enter the number of the line showing the penalty in the ‘Select Line’ box and select [View]
13. Select [Update] and amend the penalty figure to the revised amount
14. Select [OK]
15. Make an SA note on the customers record