EM6051 - Contract Settlements: Penalties: Calculation Outline
The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.
You should work out the maximum statutory penalties incurred (and still in date for formal proceedings) by reference to the offences committed EM4500+.
At this stage you should decide, on the evidence so far shown, the abated penalties EM6052.
If the penalty is in respect of an error (inaccuracy) in a return or other document that
- relates to a tax period beginning on or after 1 April 2008, and
- has a filing date on or after 1 April 2009
you must not use the following guidance to work out the penalty. You should instead refer to the Compliance Handbook at CH82000+.