EM4902 - Penalties: Information Returns: Failure to Provide Information etc - Procedures

TMA70/S98

TMA70/S100C

Any Higher Officer or above can commence Section 98 penalty proceedings. Section 100C(1) provides that ‘an officer of the Board authorised by the Board for the purposes of this section may commence proceedings’. The authorisation made by HMRC continues to cover all Higher Officers or above, see EM5324.

You can find guidance on procedures under TMA70/S100C in ARTG7540, and there is now an application form, SA649, in SEES to use where you are seeking penalties under Section 100C(2).

Although the decision to begin proceedings must be made by a Grade 6 it is not necessary for that person to provide the application notice. The HO or above who provides the application notice should if possible attend and present the case for HMRC at the subsequent hearing.

The continuing daily penalty cannot be incurred unless an initial penalty of up to £300 maximum has first been imposed by the tribunal in proceedings under Section 98(1)(i).

The maximum continuing penalty is £60 per day.

Once the initial penalty has been imposed you need to allow a short time for the outstanding return(s) to be sent in. If you do not receive them within 14 days consider making a determination of continuing penalties.

You should normally write to the taxpayer (with a copy to any agent acting)

  • reminding them of the penalty already imposed,
  • pointing out that continued failure to complete the return can result in further penalties up to £60 per day, and
  • saying that you intend to make a determination of such penalties if the return is not received within a further 14 days.

You should invite the taxpayer to discuss any problems about completing the return with you and the general tone should be a helpful one.

If you think it may be useful you should attempt to contact the taxpayer by telephone or personal call. This must of course be done tactfully. You should also consider whether there is any doubt that the taxpayer is at the address where correspondence has been sent and if so attempt to verify this and/or use recorded delivery service for the warning letter.

If you have not received the return at the end of 14 days after the further warning letter was sent, make a determination EM4903 of continuing penalties without delay.