UTT17420 - Penalties: assessing a penalty: time limit to assess a penalty

An assessment of a penalty for a notification failure in respect of an annual period may not be made later than

  • 6 months after the failure or inaccuracy first comes to the attention of an officer of Revenue & Customs, or
  • 6 years after the end of the financial year in which the notification should have been given.

A notification failure may come to HMRC’s attention when a notification is submitted late.

Examples

Example 1

A qualifying company has a company tax return filing date of 31 December 2022. It has uncertain tax positions in respect of corporation tax which need to be notified. It has until 31 December 2022 to submit its Uncertain Tax Treatment (UTT) notification in respect of corporation tax but does not submit its UTT notification until 15 January 2023. As the notification was given after the statutory filing date for the relevant return, the company is liable to a penalty unless they had a reasonable excuse. The penalty must be issued within 6 months (15 July 2023).

Example 2

A qualifying company has a financial year ending 31 December 2022. It has uncertain tax positions in respect of VAT which need to be notified. The company makes payments on account so is required to submit its final VAT return for the financial year ending 31 December 2022 by 31 January 2023 but does not submit its UTT notification until 28 February 2023. Therefore, the penalty must be assessed by 28 August 2023.

Example 3

A qualifying company has a company tax return filing date of 31 December 2022. It has until 31 December 2022 to submit its UTT notification in respect of corporation tax but does not submit a UTT notification. HMRC enquires into a subsequent company tax return and on 12 September 2028 becomes aware that an uncertain amount should have been notified for previous years including in respect of the company tax return due by 31 December 2022. The six-year rule applies meaning HMRC has until 31 December 2028 to assess a penalty in relation to the filing date of 31 December 2022.