DST65100 - Failure to Notify
‘Failure to notify’ means that the Responsible Member has not complied with their obligation to notify HMRC that the group is within scope of Digital Services Tax as per FA20/PART2/S54.
If the Responsible Member fails to notify HMRC within 90 days of the end of the first accounting period for which the thresholds have been reached the Responsible Member will be liable to a penalty under Schedule 41 of Finance Act 2008, see DST53000.
HMRC cannot charge a penalty if the Responsible Member had a reasonable excuse for not notifying us at the appropriate time, provided that they did so without unreasonable delay after the excuse had ended, see CH71500.
Penalties for failure to notify are designed to address the behaviour that caused the failure. The more serious the behaviour the higher the possible penalty will be. There are three types of behaviour:
- deliberate and concealed
- deliberate but not concealed, or
- non-deliberate.
The penalty payable is capped depending on the seriousness of the behaviour:
- For a deliberate and concealed act or failure, 100% of the potential lost revenue,
- For a deliberate but not concealed act of failure, 70% of the potential lost revenue, and
- For any other case, 30% of the potential lost revenue.
Potential lost revenue is the amount of tax unpaid by the group 12 months after the accounting period has ended.
The Compliance Handbook (CH70000) has further details regarding failure to notify penalties:
- Please refer to CH72000 to determine the type of failure to notify.
- Please refer to CH72500 how to calculate the penalty.
- Please refer to CH74000 how to process the penalty.
- Please refer to CH74500 how to deal with an appeal to the penalty.
The Responsible Member will have a 30-day notice period to pay the penalty from the point at which the penalty is raised.