CH81012 - Penalties for inaccuracies: in what circumstances is a penalty payable: commencement date - part 1
Income Tax, Capital Gains Tax, Corporation Tax, PAYE, Class 1, Class 1A and Class 4 NICs, Construction Industry Scheme, VAT
There are different commencement dates for
Penalties under Paragraphs 1 and 2
Subject to the exceptions below, this is the normal rule for the commencement date for penalties under paragraphs 1 and 2:
The penalties for
- inaccuracies in returns or other documents (FA07/SCH24/PARA1), and
- failing to notify HMRC of an under-assessment to tax (FA07/SCH24/PARA2)
apply where
- the inaccuracy is contained in (or the under-assessment relates to) a return or other document which is due to be filed on or after 1 April 2009, and
- the return or other document (or under-assessment) relates to a tax period beginning on or after 1 April 2008.
For income tax and corporation tax cases the return is based on accounts with a basis period ending in the period covered by the return. For 2008-09 the accounts basis period may start before 1 April 2008. For example, a 2008-09 income tax return could include accounts with a basis period 1 November 2007 to 31 October 2008. The tax period is the period covered by the return (6 April 2008 to 5 April 2009) not the period covered by the accounts. If there is an inaccuracy in the 2008-09 return, the penalty will be under FA 2007 Schedule 24.
Exceptions to the normal rule in Paragraphs 1 and 2
- The documents in the following situations either relate to a different tax period to that in the normal rule, or must carry a specific date. In all cases the filing date for the return or document must be on or after 1 April 2009. Documents relating to
- claims under the Thirteenth Council Directive (arrangements for the refund of VAT to persons not established in Community territory) must be for years commencing on or after 1 July 2008.
- claims under the Eighth Council Directive (arrangements for the refund of VAT to taxable persons not established in the territory of the country) must be for years commencing on or after 1 January 2009.
- all other claims for repayments of tax made on or after 1 April 2009 which are not related to a tax period, must be dated on or after 1 April 2009.
- any other case where the person’s liability to pay relevant tax arises on or after 1 April 2009, must be dated on or after 1 April 2009.
- Where the inaccuracy relates to
- a corporation tax credit, see CH81071, or
- a return by the Administrator of a Registered Pension Scheme
the penalty provisions apply where
- the inaccuracy is contained in (or the under-assessment relates to) a return or other document which is due to be filed on or after 1 April 2010, and
- the return or other document (or under-assessment) relates to a tax period beginning on or after 1 April 2009.
- Where the inaccuracy relates to a form P11D(b) - return of Class 1A National Insurance Contributions - the penalty provisions apply where the inaccuracy is contained in a return relating to 2010-11 or a later year.
Penalties for incorrect forms P11D(b) for years up to and including 2009-10 are due under Regulations 81(1) Social Security (Contributions) Regulations 2001, see COG914075.
Penalties under Paragraph 1A
An inaccuracy in a person’s (p’s) return or other document may be caused by the action of another person (T). T may be charged a penalty in respect of this inaccuracy if they deliberately supplied false information or deliberately withheld information from P with the intention of making P’s return or document inaccurate (FA07/SCH24/PARA1A).
The penalty for deliberately supplying false information to, or deliberately withholding information from, a person with the intention of making that person’s document inaccurate applies where
- the inaccuracy is contained in a return or other document which is due to be filed on or after 1 April 2010, and
- the return or other document relates to a tax period beginning on or after 1 April 2009.
See CH81165 onwards for further guidance on penalties under paragraph 1A.