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.