CH81030 - Penalties for Inaccuracies: In what circumstances is a penalty payable: What period are penalties for inaccuracies charged for

You must check the date from which these rules apply for the tax or duty you are dealing with. See CH81011 for full details.

Penalties for inaccuracies are chargeable for a tax period. A tax period is

  • a tax year
  • an accounting period, or
  • any other period for which tax is charged or due.

For income tax and corporation tax cases, an accounts period is not an accounting period, see CH81012.

A tax liability may arise for a single day and from a single action. For example, an Inheritance Tax liability may arise as a result of a person’s death. The date of death is a tax period.

You should refer to the technical guidance for the specific tax or duty if you are unsure about what is a tax period.

If there are multiple penalties you can use NPPS to create letters outside of the NPPS system to ensure that only one letter is issued to the taxpayer, which details the penalty information for each period. See cog90840

PAYE Real Time Information Returns and CIS monthly returns

In July 2013 the assessing provision in paragraph 13 of schedule 24 was amended for PAYE Real Time Information returns and CIS monthly returns.

Where a person is liable for two or more penalties relating to PAYE RTI returns, or for two or more penalties relating to CIS returns, and the penalties are assessed for more than one tax period, then instead of having to state each individual tax period in the notice of assessment, the amendment to paragraph 13 means we can issue a single notice for a tax year or part tax year.

The amendment to Paragraph 13 only allows you to issue a single notice of assessment for multiple penalties relating to multiple tax periods. You must still provide the employer or contractor with a full explanation of the penalties you are charging for each individual tax period.

Note: the new assessing rules only apply to RTI returns and CIS monthly returns and apply to any assessment made on or after 17th July 2013.