Soft Drinks Industry Levy: Penalty for late submission and failure to submit a return
Published 29 October 2018
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Who is likely to be affected
Businesses registered for the Soft Drinks Industry Levy that either do not submit a quarterly return or fail to submit a quarterly return on time.
General description of the measure
This measure allows penalties to be raised against registered businesses that either do not submit a quarterly return or fail to submit a quarterly return on time.
Policy objective
This measure will help to provide a proportionate and fair penalty regime and drive compliance.
Background to the measure
This measure was announced at Budget 2018.
The Soft Drinks Industry Levy was announced at Budget 2016.
A consultation document (Soft Drinks Industry Levy) was published on 18 August 2016. The government’s response to this consultation was published on 5 December 2016. The levy commenced on 6 April 2018.
Detailed proposal
Operative date
This measure will have effect from 1 April 2019. Quarterly returns covering the period April to June 2019, and which are received late or not at all after the due date of 30 July 2019, will be subject to the penalty.
Current law
Current law relating to penalties for a failure to file a return on time is contained in schedule 55 to the Finance Act 2009. This measure ensures that the levy is covered by sections 13A to 13E of the Finance Act 2009.
Proposed revisions
Legislation will be introduced in Finance Bill 2018-19 amending schedule 55 of the Finance Act 2009 to allow penalties to be raised for failure to make a return or for late receipt of a return. The amendment will insert item 13A in the Table, engaging section 13A to 13E of schedule 55 to the Finance Act 2009.
The first late return will lead to a penalty for a fixed amount of £100. For the second late return within a 12 month period, the fixed amount is £200. A third late return within 12 months of the second means a fixed penalty of £300, and the penalty for a fourth or subsequent late return within 12 months of the most recent late return is a fixed amount of £400.
Where a return for a particular return period is still not filed within 6 months, a further penalty is issued in the amount of 5% of the Soft Drinks Industry Levy liability for that return period, or £300, whichever is greater.
Where a return for a particular return period is still not filed within 12 months, a further penalty is issued in the amount of either 5%, 70% or 100% (depending on the behaviour of the customer) of the Soft Drinks Industry Levy liability for that return period, or £300, whichever is greater.
Legislation will also be introduced to eliminate an inconsistency between the uncommenced provisions of schedule 11 to the Finance (No.3) Act 2010 and the amendments made by schedule 11 to the Finance Act 2017 that will ensure that the ability to raise a late payment penalty under schedule 56 to the Finance Act 2009 will not be affected if amendments contained in schedule 11 to the Finance (No.3) Act 2010 are commenced.
Summary of impacts
Exchequer impact (£m)
| 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 |
|---|---|---|---|---|---|
| - | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impact.
Impact on individuals, households and families
There is no impact on individuals because it only affects non-compliant liable soft drinks packagers and importers registered for the levy.
The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be any impacts for groups sharing protected characteristics.
Impact on business including civil society organisations
This measure will have no impact on civil society organisations.
It will also have no impact on businesses registered for the levy who are making a return by the due date, although businesses will incur one-off costs of familiarisation with this new measure.
The measure will only impact on the businesses that are failing to submit a return on time. These businesses will receive a penalty and may also incur costs in dealing with HMRC in connection with any penalty received.
A business that incurs a penalty for late filing of a quarterly return may request a review or appeal to the First-tier Tribunal.
Operational impact (£m) (HMRC or other)
There are negligible financial consequences.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
Monitoring will be done through information collected from receipts.
Further advice
If you have any questions about this change, contact Steve Morgan by email: indirecttax.projectteam@hmrc.gsi.gov.uk.