108Suspension of penalties during currency of agreement for deferred payment
(1)This section applies if—
(a)a person (“P”) fails to pay an amount of tax falling within the Table in subsection (5) when it becomes due and payable,
(b)P makes a request to an officer of Revenue and Customs that payment of the amount of tax be deferred, and
(c)an officer of Revenue and Customs agrees that payment of that amount may be deferred for a period (“the deferral period”).
(2)P is not liable to a penalty for failing to pay the amount mentioned in subsection (1) if—
(a)the penalty falls within the Table, and
(b)P would (apart from this subsection) become liable to it between the date on which P makes the request and the end of the deferral period.
(3)But if—
(a)P breaks the agreement (see subsection (4)), and
(b)an officer of Revenue and Customs serves on P a notice specifying any penalty to which P would become liable apart from subsection (2),
P becomes liable, at the date of the notice, to that penalty.
(4)P breaks an agreement if—
(a)P fails to pay the amount of tax in question when the deferral period ends, or
(b)the deferral is subject to P complying with a condition (including a condition that part of the amount be paid during the deferral period) and P fails to comply with it.
(5)The taxes and penalties referred to in subsections (1) and (2) are—
| Tax | Penalty |
|---|---|
| Income tax or capital gains tax | Surcharge under section 59C(2) or (3) of TMA 1970 |
| Value added tax | Surcharge under section 59(4) or 59A(4) of VATA 1994 |
| Aggregates levy | Penalty interest under paragraph 5 of Schedule 5 to FA 2001 |
| Climate change levy | Penalty interest under paragraph 82 of Schedule 6 to FA 2000 |
| Landfill tax | Penalty interest under paragraph 27(2) of Schedule 5 to FA 1996 |
| Insurance premium tax | Penalty under paragraph 15(2) or (3) of Schedule 7 to FA 1994 which is payable by virtue of paragraph 15(1)(a) of that Schedule. |
| Any duty of excise | Penalty under section 9(2) or (3) of FA 1994 which is imposed for a failure to pay an amount of any duty of excise or an amount payable on account of any such duty. |
(6)If the agreement mentioned in subsection (1)(c) is varied at any time by a further agreement between P and an officer of Revenue and Customs, this section applies from that time to the agreement as varied.
(7)The Treasury may by order amend the Table by adding or removing a tax or a penalty.
(8)An order under subsection (7) is to be made by statutory instrument.
(9)A statutory instrument containing an order under subsection (7) is subject to annulment in pursuance of a resolution of the House of Commons.
(10)In this section, except in the entries in the Table, “penalty” includes surcharge and penalty interest.
(11)This section has effect where the agreement mentioned in subsection (1)(c) is made on or after 24 November 2008.