COM33040 - Background: typical case examples: company pays late and delivers late
An established company fails to meet its payment and filing obligations on time. It incurs late payment interest (LPI) and the higher flat-rate penalty, before finally meeting its obligations.
The events are numbered in date order, and identified as follows.
- Business event - action taken or arising outside HMRC.
- Automatic event - automatic COTAX action.
- Procedural action - action taken by an operator.
| Order and type of event | Action or actions taken |
|---|---|
| 1 Business event | Company AP ends (normal 12 month period). |
| Approximately 1 month after the recorded AP ends | |
| 2 Automatic event | COTAX issues a notice to deliver, calculates the filing date (Word 42KB), records the specified period and the issue of the notice to deliver and creates the next AP on the COTAX record. |
| Some time later.................. | |
3 Automatic event |
CT600 first payment reminder (PR1) issued, 12 days before normal due date (Word 49KB) as no payment or NIL payslip returned to Accounts Office. |
4 Business event |
Payment due date passes with Nil paid. |
5 Automatic event |
Late payment interest starts to run on unpaid tax from the normal due date. |
6 Automatic event |
CT208 combined return and payment reminder (PR2) issued 28 days before the filing date as no payment or NIL payslip has been received and the return is not yet logged. |
7 Business event |
Filing date passes without receipt of a return. |
8 Automatic event |
COTAX records first flat-rate penalty (F1) stage reached and company incurs flat-rate penalty of £100 or £500 as appropriate. |
9 Automatic event |
14 days later COTAX records first flat-rate penalty (F1) stage charged and issues the first flat-rate penalty. |
10 Automatic event |
30 days later COTAX issues a payment application for the penalty. |
| Some time later.................. | |
| 11 Business event | Filing date + 3 months + 1 day passes without receipt of a return. |
| 12 Automatic event | COTAX records second flat-rate penalty (F2) stage reached and flat-rate penalty increases to £200 or £1000 as appropriate. |
| 13 Automatic event | 14 days later COTAX records second flat-rate penalty (F2) stage charged and issues the second flat-rate penalty. |
| 14 Automatic event | 30 days later COTAX issues a payment application for the penalty. |
| 15 Business event | Return received late, but before the tax-related penalty stage reached. |
| 16 Automatic event | COTAX automatically captures the details and records the self assessment. |
| 17 Business event | Full payment received at Accounts Office to settle the unpaid CT, late payment interest and penalties. |
| 18 Automatic event | COTAX posts interest charge, as further interest accrual stops when full payment is received. |
See: