SAOG21301 - Assessing a penalty: penalty involving time limits - Example 2

Margaret is a Customer Compliance Manager (CCM) who takes up various issues with a qualifying private limited company. On 13 October 2020 the company’s representatives tell Margaret that a substantial amount of entertaining expenditure has been included in the travel and subsistence expenses debit in the company’s profit and loss account and thus wrongly claimed for tax relief.

The problem arises from miscoding in the accounting system. This miscoding affects the years ended 30 September 2010 to 30 September 2017.

Margaret notes that the company and its SAO submitted the respective notifications and certificates for each year on time. The SAO certificates were all unqualified. Margaret contends that the certificates were carelessly inaccurate. (There is also a tenable view that the SAO had failed in the main duty.)

The penalty position as at 13 October 2020 would be

Year ended	Filing date	Inaccuracy comes to Margaret’s attention on	Penalty to be assessed by	Legislation Schedule 46 FAO9
30/09/2010	30/06/2011	13/10/2020	30/06/2017	Para9(2)(b)
30/09/2011	30/06/2012	13/10/2020	30/06/2018	Para9(2)(b)
30/09/2012	30/06/2013	13/10/2020	30/06/2019	Para9(2)(b)
30/09/2013	30/06/2014	13/10/2020	30/06/2020	Para9(2)(b)
30/09/2014	30/06/2015	13/10/2020	13/04/2021	Para9(2)(a)
30/09/2015	30/06/2016	13/10/2020	13/04/2021	Para9(2)(a)
30/09/2016	30/06/2017	13/10/2020	13/04/2021	Para9(2)(a)
30/09/2017	30/06/2018	13/10/2020	13/04/2021	Para9(2)(a)

Years to 30 September 2013 are already out of date and so no penalty can be assessed for those years. The remaining years would attract an SAO inaccuracy penalty provided the assessments are made on or before 13 April 2021.

Mid-sized businesses do not have a CCM. For the definition of a Mid-sized business, see SAOG05010. For Mid-sized businesses, the Mid-Sized Business Customer Engagement Team (CET) or a Caseworker would assess the penalty in the above example.