COM33050 - Background: typical case examples: company neither pays nor delivers
An established company fails to meet its payment and filing obligations.
COTAX automatically issues the first and second flat-rate penalty determinations. The caseworker makes a revenue determination in respect of estimated tax outstanding, together with the first tax-related penalty determination. The company incurs late payment interest which continues to run as no payment is made. COTAX automatically issues the second tax-related penalty determination.
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 | CT208 first payment reminder (PR1) issued, 12 days before the 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 has not been 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 company incurs flat-rate penalty of £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. |
Some time later......... | |
15 Business event | AP end date + 18 months + 1 day passes without receipt of a return. |
16 Automatic event | Company incurs a 10 per cent tax-related penalty. COTAX records 10 per cent tax-related penalty stage reached and places company on work list DRNR (Determination Required No Return List). |
17 Procedural action | Caseworker makes revenue determination using function RAMA (Record / Amend Assessment) and tax-related penalty determination using function PPEN (Prepare Penalty Determination). Note: If the caseworker chooses not to use PPEN, COTAX will automatically issue the penalty 14 days later. |
18 Automatic event | COTAX issues notices of revenue determination and a 10 per cent tax-related penalty determination. |
19 Automatic event | 30 days after the issue of the revenue determination and the penalty, COTAX issues first payment application. |
20 Automatic event |
14 days later COTAX issues further payment application. |
21 Automatic event | 14 days later COTAX issues the final payment application. |
22 Automatic event | 14 days later, as no payment received, Accounts Office refers the case to the local Debt Management office, and the LA (Word 28KB) (Local Action) signal is set. |
Some time later......... | |
23 Business event | AP end date + 24 months + 1 day passes without receipt of a return. |
24 Automatic event | Company incurs the second 10 per cent tax-related penalty and COTAX records second tax-related penalty stage reached (TR2) and issues a further tax-related penalty determination, bringing the penalty up to 20 per cent (for TR2) as TR1 has become final in the absence of an appeal. |
25 Automatic event | Late payment interest continues to accrue on any unpaid tax from the normal due date. |
See: