SCHEDULES

SCHEDULE 11Penalty for failure to make payments on time

7

After paragraph 8 insert—

Amount of penalty: amounts in respect of periods of between 2 and 6 months

8A

1

Paragraphs 8B to 8E apply in the case of a payment of tax falling within any of items 6A,F16BA, 6BB, 6C and 11A to 11M in the Table which relates to a period of less than 6 months but more than 2 months.

2

But those paragraphs do not apply in the case of a payment mentioned in paragraph 3(1)(d).

3

Paragraph 8K sets out how payments on account of VAT (item 6A) are to be treated for the purposes of paragraphs 8B to 8E.

8B

1

A penalty period begins to run on the penalty date for the payment of tax.

2

The penalty period ends with the day 12 months after the date specified in or for the purposes of column 4 for the payment, unless it is extended under paragraph 8C(2)(c) or 8H(2)(c).

8C

1

This paragraph applies if—

a

a penalty period has begun under paragraph 8B or 8G because P has failed to make a payment (“payment A”), and

b

before the end of the period, P fails to make another payment (“payment B”) falling within the same item in the Table as payment A.

2

In such a case—

a

paragraph 8B(1) does not apply to the failure to make payment B,

b

P is liable to a penalty under this paragraph for that failure, and

c

the penalty period that has begun is extended so that it ends with the day 12 months after the date specified in or for the purposes of column 4 for payment B.

3

The amount of the penalty under this paragraph is determined by reference to the number of defaults that P has made during the penalty period.

4

If the default is P's first default during the penalty period, P is liable, at the time of the default, to a penalty of 2% of the amount of the default.

5

If the default is P's second default during the penalty period, P is liable, at the time of the default, to a penalty of 3% of the amount of the default.

6

If the default is P's third or a subsequent default during the penalty period, P is liable, at the time of the default, to a penalty of 4% of the amount of the default.

7

For the purposes of this paragraph—

a

P makes a default when P fails to pay an amount of tax in full on or before the date on which it becomes due and payable;

b

in accordance with sub-paragraph (1)(b), the references in sub-paragraphs (3) to (6) to a default are references to a default in relation to the tax to which payments A and B relate;

c

a default counts for the purposes of those sub-paragraphs if (but only if) the period to which the payment relates is less than 6 months;

d

the amount of a default is the amount which P fails to pay.

8

A penalty period may be extended more than once under sub-paragraph (2)(c).

8D

If any amount of the tax is unpaid after the end of the period of 6 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

8E

If any amount of the tax is unpaid after the end of the period of 12 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

Amount of penalty: amounts in respect of periods of 2 months or less

8F

1

Paragraphs 8G to 8J apply in the case of a payment of tax falling within any of items 6A, 6C and 11A to 11M in the Table which relates to a period of 2 months or less.

2

But those paragraphs do not apply in the case of a payment mentioned in paragraph 3(1)(d).

8G

1

A penalty period begins to run on the penalty date for the payment of tax.

2

The penalty period ends with the day 12 months after the date specified in or for the purposes of column 4 for the payment, unless it is extended under paragraph 8C(2)(c) or 8H(2)(c).

8H

1

This paragraph applies if—

a

a penalty period has begun under paragraph 8B or 8G because P has failed to make a payment (“payment A”), and

b

before the end of the period, P fails to make another payment (“payment B”) falling within the same item in the Table as payment A.

2

In such a case—

a

paragraph 8G(1) does not apply to the failure to make payment B,

b

P is liable to a penalty under this paragraph for that failure, and

c

the penalty period that has begun is extended so that it ends with the day 12 months after the date specified in or for the purposes of column 4 for payment B.

3

The amount of the penalty under this paragraph is determined by reference to the number of defaults that P has made during the penalty period.

4

If the default is P's first, second or third default during the penalty period, P is liable, at the time of the default, to a penalty of 1% of the amount of the default.

5

If the default is P's fourth, fifth or sixth default during the penalty period, P is liable, at the time of the default, to a penalty of 2% of the amount of the default.

6

If the default is P's seventh, eighth or ninth default during the penalty period, P is liable, at the time of the default, to a penalty of 3% of the amount of the default.

7

If the default is P's tenth or a subsequent default during the penalty period, P is liable, at the time of the default, to a penalty of 4% of the amount of the default.

8

For the purposes of this paragraph—

a

P makes a default when P fails to pay an amount of tax in full on or before the date on which it becomes due and payable;

b

in accordance with sub-paragraph (1)(b), the references in sub-paragraphs (3) to (7) to a default are references to a default in relation to the tax to which payments A and B relate;

c

a default counts for the purposes of those sub-paragraphs if (but only if) the period to which the payment relates is less than 6 months;

d

the amount of a default is the amount which P fails to pay.

9

A penalty period may be extended more than once under sub-paragraph (2)(c).

8I

If any amount of the tax is unpaid after the end of the period of 6 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

8J

If any amount of the tax is unpaid after the end of the period of 12 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.