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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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Insurance Premium Tax: Calculation and notification of a penalty: Insurance Premium Tax penalty letter to an insured person

Please note: penalties under Schedule 7 Finance Act 1994 for failure to notify liability to register have been replaced by the Failure to Notify penalty introduced by Schedule 41 Finance Act 2008. The Failure to Notify penalty applies where an obligation to notify liability to register for IPT occurs on or after 01/04/2010. Penalties under Schedule 7 Finance Act 1994 will continue to apply where an obligation to notify occurs before 01/04/2010.

Please see the Compliance Handbook CH70000 for more information about the Failure to Notify penalty.

Please note: penalties under the Finance Act 1994 for failure to provide information and failure to produce records have now been replaced by penalties under Schedule 36 Finance Act 2008 where HMRC have requested information or documents on or after 01 /04/2010. If HMRC requested information or documents before 01/04/2010 the Finance Act 1994 penalties will continue to apply.

Please the Compliance Handbook CH20000 for more information about information and inspection powers.

Name ……………………………………….

Address ……………………………………. Period Ref …………………………………

………………………………………………..

……………………………………………….. Date …………………………………………

A copy of this letter is being sent to all insured parties that received a notice of liability

Dear

On ……………………………… you were served with a notice of liability to Insurance Premium Tax under section 65 of Finance Act 1994.

The amount of tax due from the date notified in the Notice of Liability (date) ……………………………. to (date of assessment) ……………………………. was assessed as being £………………. and you were notified of this amount on …………………………….

Section 65(6) provides that you and (name of insurer) ………………………… are jointly and severally liable for the payment of this assessment.

Failure to pay this assessment within 30 days attracts a financial penalty under s16(2), Schedule 7 Finance Act 1994 of 5% of tax assessed or, if it is greater £250.

You are therefore liable to a penalty of £…………………… This amount should be paid immediately to the Birmingham Tax Accounting Centre [insert address] enclosing a copy of this letter and using the enclosed reply paid envelope.

TAKE NOTICE that S16(3), Schedule 7 of the Finance Act 1994 also provides for a daily rate penalty of £20 for each day that the tax assessed remains unpaid and that continued failure to pay this amount will render you liable to further penalty assessments.

If you consider that this penalty should not have been imposed you may, by writing to HMRC at the above address within 45 days of the date of this notice, ask them to reconsider their decision. If you are still not satisfied you may, if you wish, appeal to an independent Tribunal.

Yours faithfully