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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: Interest on under declarations

Please note: penalties under Schedule 7 Finance Act 1994 for failure to notify liability to register have been replaced by the Failure to Notify penalty introduced by Schedule 41 Finance Act 2008.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note: penalties under the Finance Act 1994 for failure to provide information and failure to produce records have now been replaced by penalties under Schedule 36 Finance Act 2008 where HMRC have requested information or documents on or after 01 /04/2010.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.

Interest can be calculated and an assessment issued for under-declarations as follows

  • 2 years after the time the tax due for the accounting period is determined, or
  • 3 years after the end of the accounting period

Interest is only calculated on officer’s assessments and voluntary disclosures.

The tax is determined by whichever is the later

  • issue of an officer’s assessment (date of IPT 35)
  • an amendment to an officer’s assessment (date of IPT 38)
  • issue of a voluntary disclosure (date of IPT 36)
  • any amendment to a voluntary disclosure (date of IPT 39)
  • a tribunal decision or court judgement finally determining the tax due
  • any agreement to settle the appeal.