SCHEDULES
C1C2SCHEDULE 24Penalties for errors
Sch. 24 applied (6.4.2008) by The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004), Sch. 4 paras. 22(7), 31(8) (as amended by The Social Security (Contributions) (Amendment No. 3) Regulations 2008 (S.I. 2008/636), regs. 1(3)(b), 7)
Part 1Liability for penalty
Error in taxpayer's document
I11
1
A penalty is payable by a person (P) where—
a
P gives HMRC a document of a kind listed in the Table below, and
b
Conditions 1 and 2 are satisfied.
2
Condition 1 is that the document contains an inaccuracy which amounts to, or leads to—
a
an understatement of P's liability to tax,
b
a false or inflated statement of a loss by P, or
c
a false or inflated claim to repayment of tax.
3
Condition 2 is that the inaccuracy was careless or deliberate (within the meaning of paragraph 3).
4
Where a document contains more than one inaccuracy, a penalty is payable for each inaccuracy.
Tax | Document |
|---|---|
Income tax or capital gains tax | Return under section 8 of TMA 1970 (personal return). |
Income tax or capital gains tax | Return under section 8A of TMA 1970 (trustee's return). |
Income tax or capital gains tax | Return, statement or declaration in connection with a claim for an allowance, deduction or relief. |
Income tax or capital gains tax | Accounts in connection with ascertaining liability to tax. |
Income tax or capital gains tax | Partnership return. |
Income tax or capital gains tax | Statement or declaration in connection with a partnership return. |
Income tax or capital gains tax | Accounts in connection with a partnership return. |
Income tax | Return for the purposes of PAYE regulations. |
Construction industry deductions | Return for the purposes of regulations under section 70(1)(a) of FA 2004 in connection with deductions on account of tax under the Construction Industry Scheme. |
Corporation tax | Company tax return under paragraph 3 of Schedule 18 to FA 1998. |
Corporation tax | Return, statement or declaration in connection with a claim for an allowance, deduction or relief. |
Corporation tax | Accounts in connection with ascertaining liability to tax. |
VAT | VAT return under regulations made under paragraph 2 of Schedule 11 to VATA 1994. |
VAT | Return, statement or declaration in connection with a claim. |
Income tax, capital gains tax, corporation tax or VAT | Any document which is likely to be relied upon by HMRC to determine, without further inquiry, a question about—
|
Under-assessment by HMRC
I22
1
A penalty is payable by a person (P) where—
a
an assessment issued to P by HMRC understates P's liability to tax, and
b
P has failed to take reasonable steps to notify HMRC, within the period of 30 days beginning with the date of the assessment, that it is an under-assessment.
2
In deciding what steps (if any) were reasonable HMRC must consider—
a
whether P knew, or should have known, about the under-assessment, and
b
what steps would have been reasonable to take to notify HMRC.
3
In sub-paragraph (1) “tax” means—
a
income tax,
b
capital gains tax,
c
corporation tax, and
d
VAT.
Degrees of culpability
I33
1
Inaccuracy in a document given by P to HMRC is—
a
“careless” if the inaccuracy is due to failure by P to take reasonable care,
b
“deliberate but not concealed” if the inaccuracy is deliberate but P does not make arrangements to conceal it, and
c
“deliberate and concealed” if the inaccuracy is deliberate and P makes arrangements to conceal it (for example, by submitting false evidence in support of an inaccurate figure).
2
An inaccuracy in a document given by P to HMRC, which was neither careless nor deliberate when the document was given, is to be treated as careless if P—
a
discovered the inaccuracy at some later time, and
b
did not take reasonable steps to inform HMRC.
Sch. 24 applied (N.I.) (1.4.2008) by The Education (Student Loans) (Repayment) Regulations (Northern Ireland) 2000 (S.R. 2000/121), regs. 7(2A)(b), 26(4) (as amended by S.R. 2008/129, regs. 1, 3(a), 4)