CTM94200 - CTSA: penalties for late returns: Determination: Procedure
TMA70/S100
Penalties incurred under FA98/SCH18/PARA17 & 18 are charged by formal determination. The notice of determination served on the company must state:
- the date of issue,
and
- the time within which the company may appeal.
COTAX deals with these determinations.
Penalties under Paragraphs 17 & 18 are charged for each failure to deliver a return by the filing date. A notice to deliver can require the delivery of a return for more than one return period so more than one penalty can be due in respect of a single notice.
Examples 1 and 2 below contain examples of this. In both examples the company incurs the penalties in respect of the same Paragraph 3 notice and they are normally charged in the same determination.
Example 1
In this example the company incurs the penalties in respect of the same Paragraph 3 notice and they are normally charged in the same determination.
- Company A makes up accounts for the year to 31 December 2018.
- It ceases trading on 30 September 2018 but continues to receive investment income after that date.
- Accounting periods end on 30 September 2018 and 31 December 2018.
- A Paragraph 3 notice specifying the period 1 January 2018 to 31 December 2018 is served on 1 April 2019.
- The company must file a return for both the accounting periods ended 30 September 2018 and 31 December 2018.
- It fails to deliver both returns until 1 February 2020.
The company is liable to a flat-rate penalty of:
- £100 for failing to deliver its return for the accounting period to 30 September 2018 by the filing date, 31 December 2019,
- £100 for failing to deliver its return for the accounting period to 31 December 2018 by the same filing date.
Example 2
In this example the company incurs the penalties in respect of the same Paragraph 3 notice and they are normally charged in the same determination.
- Company B makes up its accounts for the 12 months to 31 December 2018 and 3 months to 31 March 2019, both of which are accounting periods.
- A notice to deliver is served on 1 July 2019, specifying the period 1 April 1918 to 31 March 2019.
- The company must file a return for both the accounting periods ended 31 December 2018 and 31 March 2019.
- The company delivers both returns on 1 May 2020.
The company is liable to a flat-rate penalty of:
- £200 for failing to deliver the return for the year to 31 December 2018 within three months of the filing date (31 December 2019),
- £100 for failing to deliver its return for the period to 31 March 2019 by the filing date (31 March 2020).