Finance Act 2008

Part 7U.K.Penalties

F1... penalties [F2for failure to comply or obstruction] U.K.

39(1)This paragraph applies to a person who—U.K.

(a)fails to comply with an information notice, or

(b)deliberately obstructs an officer of Revenue and Customs in the course of an inspection under Part 2 of this Schedule that has been approved by the [F3tribunal].

(2)[F4The person] is liable to a penalty of £300.

(3)The reference in this paragraph to a person who fails to comply with an information notice includes a person who conceals, destroys or otherwise disposes of, or arranges for the concealment, destruction or disposal of, a document in breach of paragraph 42 or 43.

Daily default penaltiesU.K.

40(1)This paragraph applies if the failure or obstruction mentioned in paragraph 39(1) continues after the date on which a penalty is imposed under that paragraph in respect of the failure or obstruction.U.K.

(2)The person is liable to a further penalty or penalties not exceeding £60 for each subsequent day on which the failure or obstruction continues.

[F5Penalties for inaccurate information and documentsU.K.

40A(1)This paragraph applies if—U.K.

(a)in complying with an information notice, a person provides inaccurate information or produces a document that contains an inaccuracy, and

(b)condition [F6A, B or C] is met.

(2)Condition A is that the inaccuracy is careless or deliberate.

(3)An inaccuracy is careless if it is due to a failure by the person to take reasonable care.

[F7(3A)Condition B is that the person knows of the inaccuracy at the time the information is provided or the document produced but does not inform HMRC at that time.]

(4)Condition [F8C] is that the person—

(a)discovers the inaccuracy some time later, and

(b)fails to take reasonable steps to inform HMRC.

(5)The person is liable to a penalty not exceeding £3,000.

(6)Where the information or document contains more than one inaccuracy, a penalty is payable for each inaccuracy.]

Power to change amount of F9... penaltiesU.K.

41(1)If it appears to the Treasury that there has been a change in the value of money since the last relevant date, they may by regulations substitute for the sums for the time being specified in paragraphs 39(2) [F10, 40(2) and 40A(5)] such other sums as appear to them to be justified by the change.U.K.

(2)In sub-paragraph (1) [F11, in relation to a specified sum,] “relevant date” means—

(a)the date on which this Act is passed, and

(b)each date on which the power conferred by that sub-paragraph has been exercised [F12in relation to that sum].

(3)Regulations under this paragraph do not apply to [F13—

(a)]any failure or obstruction which began before the date on which they come into force [F14, or

(b)an inaccuracy in any information or document provided to HMRC before that date.]

Concealing, destroying etc documents following information noticeU.K.

42(1)A person must not conceal, destroy or otherwise dispose of, or arrange for the concealment, destruction or disposal of, a document that is the subject of an information notice addressed to the person (subject to sub-paragraphs (2) and (3)).U.K.

(2)Sub-paragraph (1) does not apply if the person acts after the document has been produced to an officer of Revenue and Customs in accordance with the information notice, unless an officer of Revenue and Customs has notified the person in writing that the document must continue to be available for inspection (and has not withdrawn the notification).

(3)Sub-paragraph (1) does not apply, in a case to which paragraph 8(1) applies, if the person acts after the expiry of the period of 6 months beginning with the day on which a copy of the document was produced in accordance with that paragraph unless, before the expiry of that period, an officer of Revenue and Customs made a request for the original document under paragraph 8(2)(b).

Concealing, destroying etc documents following informal notificationU.K.

43(1)A person must not conceal, destroy or otherwise dispose of, or arrange for the concealment, destruction or disposal of, a document if an officer of Revenue and Customs has informed the person that the document is, or is likely, to be the subject of an information notice addressed to that person (subject to sub-paragraph (2)).U.K.

(2)Sub-paragraph (1) does not apply if the person acts after—

(a)at least 6 months has expired since the person was, or was last, so informed, or

(b)an information notice has been given to the person requiring the document to be produced.

Failure to comply with time limitU.K.

44U.K.A failure by a person to do anything required to be done within a limited period of time does not give rise to liability to a penalty under paragraph 39 or 40 if the person did it within such further time, if any, as an officer of Revenue and Customs may have allowed.

Reasonable excuseU.K.

45(1)Liability to a penalty under paragraph 39 or 40 does not arise if the person satisfies HMRC or [F15(on an appeal notified to the tribunal) the tribunal] that there is a reasonable excuse for the failure or the obstruction of an officer of Revenue and Customs.U.K.

(2)For the purposes of this paragraph—

(a)an insufficiency of funds is not a reasonable excuse unless attributable to events outside the person's control,

(b)where the person relies on any other person to do anything, that is not a reasonable excuse unless the first person took reasonable care to avoid the failure or obstruction, and

(c)where the person had a reasonable excuse for the failure or obstruction but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied, or the obstruction stops, without unreasonable delay after the excuse ceased.

F16Assessment of ... penaltyU.K.

46(1)Where a person becomes liable for a penalty under paragraph 39 [F17, 40 or 40A], F18... —U.K.

(a)[F19HMRC may] assess the penalty, and

(b)[F20if they do so, they must] notify the person.

(2)An assessment of a penalty under paragraph 39 or 40 must be made [F21within the period of 12 months beginning with the date on which the person became liable to the penalty, subject to sub-paragraph (3)].

[F22(3)In a case involving an information notice against which a person may appeal, an assessment of a penalty under paragraph 39 or 40 must be made within the period of 12 months beginning with the latest of the following—

(a)the date on which the person became liable to the penalty,

(b)the end of the period in which notice of an appeal against the information notice could have been given, and

(c)if notice of such an appeal is given, the date on which the appeal is determined or withdrawn.

(4)An assessment of a penalty under paragraph 40A must be made—

(a)within the period of 12 months beginning with the date on which the inaccuracy first came to the attention of an officer of Revenue and Customs, and

(b)within the period of 6 years beginning with the date on which the person became liable to the penalty.]

F23Right to appeal against ... penaltyU.K.

47[F24(1)]A person may appeal F25... against any of the following decisions of an officer of Revenue and Customs—U.K.

(a)a decision that a penalty is payable by that person under paragraph 39 [F26, 40 or 40A], or

(b)a decision as to the amount of such a penalty.

[F27(2)But sub-paragraph (1)(b) does not give a right of appeal against the amount of an increased daily penalty payable as a result of paragraph 49A.]

F28Procedure on appeal against ... penaltyU.K.

48(1)Notice of an appeal under paragraph 47 must be given—U.K.

(a)in writing,

(b)before the end of the period of 30 days beginning with the date on which the notification under paragraph 46 was issued, and

(c)to HMRC.

(2)Notice of an appeal under paragraph 47 must state the grounds of appeal.

(3)On an appeal under [F29paragraph 47(1)(a)] [F30that is notified to the tribunal, the tribunal] may confirm or cancel the decision.

(4)On an appeal under [F31paragraph 47(1)(b)] [F30that is notified to the tribunal, the tribunal] may—

(a)confirm the decision, or

(b)substitute for the decision another decision that the officer of Revenue and Customs had power to make.

(5)Subject to this paragraph and paragraph 49, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to appeals under this Part of this Schedule as they have effect in relation to an appeal against an assessment to income tax.

F32Enforcement of ... penaltyU.K.

49(1)A penalty under paragraph 39 [F33, 40 or 40A] must be paid—U.K.

(a)before the end of the period of 30 days beginning with the date on which the notification under paragraph 46 was issued, or

(b)if a notice of an appeal against the penalty is given, before the end of the period of 30 days beginning with the date on which the appeal is determined or withdrawn.

(2)A penalty under paragraph 39 [F34, 40 or 40A] may be enforced as if it were income tax charged in an assessment and due and payable.

[F35Increased daily default penaltyU.K.

49A(1)This paragraph applies if—U.K.

(a)a penalty under paragraph 40 is assessed under paragraph 46 in respect of a person's failure to comply with a notice under paragraph 5,

(b)the failure continues for more than 30 days beginning with the date on which notification of that assessment was issued, and

(c)the person has been told that an application may be made under this paragraph for an increased daily penalty to be [F36assessable].

(2)If this paragraph applies, an officer of Revenue and Customs may make an application to the tribunal for an increased daily penalty to be [F37assessable] on the person.

[F38(3)If the tribunal decides that an increased daily penalty should be assessable—

(a)the tribunal must determine the day from which the increased daily penalty is to apply and the maximum amount of that penalty (“the new maximum amount”), and

(b)from that day, paragraph 40(2) has effect in the person's case as if the new maximum amount were substituted for the amount for the time being specified there.

(4)The new maximum amount may not be more than £1,000.]

(5)But subject to that, in determining [F39the new maximum amount] the tribunal must have regard to—

(a)the likely cost to the person of complying with the notice,

(b)any benefits to the person of not complying with it, and

(c)any benefits to anyone else resulting from the person's non-compliance.

(6)Paragraph 41 applies in relation to the sum specified in sub-paragraph (4) as it applies in relation to the sums mentioned in paragraph 41(1) [F40but as if the reference in paragraph 41(2)(a) to this Act were to FA 2021].

49B(1)If [F41the tribunal makes a determination] under paragraph 49A, HMRC must notify the person.U.K.

(2)The notification must specify [F42the new maximum amount and the day from which it applies].

F43(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

F4449CU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax-related penaltyU.K.

50(1)This paragraph applies where—U.K.

(a)a person becomes liable to a penalty under paragraph 39,

(b)the failure or obstruction continues after a penalty is imposed under that paragraph,

(c)an officer of Revenue and Customs has reason to believe that, as a result of the failure or obstruction, the amount of tax that the person has paid, or is likely to pay, is significantly less than it would otherwise have been,

(d)before the end of the period of 12 months beginning with the relevant date F45..., an officer of Revenue and Customs makes an application to the Upper Tribunal for an additional penalty to be imposed on the person, and

(e)the Upper Tribunal decides that it is appropriate for an additional penalty to be imposed.

(2)The person is liable to a penalty of an amount decided by the Upper Tribunal.

(3)In deciding the amount of the penalty, the Upper Tribunal must have regard to the amount of tax which has not been, or is not likely to be, paid by the person.

(4)Where a person becomes liable to a penalty under this paragraph, HMRC must notify the person.

(5)Any penalty under this paragraph is in addition to the penalty or penalties under paragraph 39 or 40.

(6)In the application of the following provisions, no account shall be taken of a penalty under this paragraph—

(a)section 97A of TMA 1970 (multiple penalties),

(b)paragraph 12(2) of Schedule 24 to FA 2007 (interaction with other penalties), and

(c)paragraph 15(1) of Schedule 41 (interaction with other penalties).

[F46(7)In sub-paragraph (1)(d) “the relevant date” means—

(a)in a case involving an information notice against which a person may appeal, the latest of—

(i)the date on which the person became liable to the penalty under paragraph 39,

(ii)the end of the period in which notice of an appeal against the information notice could have been given, and

(iii)if notice of such an appeal is given, the date on which the appeal is determined or withdrawn, and

(b)in any other case, the date on which the person became liable to the penalty under paragraph 39.]

Enforcement of tax-related penaltyU.K.

51(1)A penalty under paragraph 50 must be paid before the end of the period of 30 days beginning with the date on which the notification of the penalty is issued.U.K.

(2)A penalty under paragraph 50 may be enforced as if it were income tax charged in an assessment and due and payable.

[F47Disclosure of third party or financial institution noticeU.K.

51A(1)This paragraph applies if—U.K.

(a)a person (“P”) is given a third party notice or financial institution notice (“the notice”), and

(b)the tribunal has disapplied the requirement in paragraph 4(1) or 4A(7)(a) (as the case may be) to give a copy of the notice to the taxpayer to whom it relates.

(2)The notice may include a requirement that P must not disclose the notice, or anything relating to it, to—

(a)the taxpayer to whom the notice relates, or

(b)any other person, except for a purpose relating to compliance with the notice.

(3)A requirement imposed under sub-paragraph (2) has effect for a period of 12 months beginning with the day on which P is given the notice unless, before the end of that period—

(a)the requirement is withdrawn in accordance with sub-paragraph (4), or

(b)the period is extended in accordance with sub-paragraph (5).

(4)An officer of Revenue and Customs may, by notice in writing to P, withdraw a requirement imposed under sub-paragraph (2).

(5)An officer of Revenue and Customs may—

(a)by notice in writing to P, extend the period for which a requirement imposed under sub-paragraph (2) has effect for a further period of 12 months (beginning with the day after the last day of the previous period), and

(b)do so on one or more occasions.

(6)An officer of Revenue and Customs may act under sub-paragraph (4) or (5) only if—

(a)the officer is an authorised officer of Revenue and Customs, or

(b)an authorised officer of Revenue and Customs has agreed to the withdrawal of the requirement or the extension of the period (as the case may be).

(7)An authorised officer of Revenue and Customs may only extend, or agree to the extension of, a period under sub-paragraph (5) if that officer has reasonable grounds for believing that not doing so might prejudice the assessment or collection of tax.]

[F4751B(1)A person who breaches a requirement imposed under paragraph 51A (not to disclose a notice or anything relating to it) is liable to a penalty of £1,000.U.K.

(2)If a person becomes liable for a penalty under sub-paragraph (1)—

(a)HMRC may assess the penalty, and

(b)if they do so, they must notify the person.

(3)The assessment must be made within the period of 12 months beginning with the date on which the breach of the requirement first came to the attention of an officer of Revenue and Customs.

(4)Paragraph 41 applies in relation to the sum specified in sub-paragraph (1) above as it applies in relation to the sums mentioned in paragraph 41(1) but as if—

(a)the reference in paragraph 41(2)(a) to this Act were to FA 2021, and

(b)paragraph 41(3) prevented the regulations from applying to any breach committed before the date on which the regulations come into force.]

[F4751C(1)A person may appeal a decision of an officer of Revenue and Customs that a penalty is payable by the person under paragraph 51B.U.K.

(2)Paragraph 48 (procedure on appeal against penalty) applies in relation to an appeal under this paragraph as it applies in relation to an appeal under paragraph 47(1)(a) but as if the reference to the notification under paragraph 46 were to the notification under paragraph 51B(2)(b).

(3)Paragraph 49 (enforcement of penalty) applies in relation to a penalty under paragraph 51B as it applies in relation to a penalty under paragraph 39 but as if the reference to the notification under paragraph 46 were to the notification under paragraph 51B(2)(b).]

Double jeopardyU.K.

52U.K.A person is not liable to a penalty under this Schedule in respect of anything in respect of which the person has been convicted of an offence.