Modifications etc. (not altering text)
C1Pt. I Chapter II (ss. 11-13) modified by Finance Act 1988 (c. 39, SIF 40:2), s. 21(a)
(1)Where any person is liable—
(a)to a penalty under any of sections 13 to [F117A] above, or
(b)for interest under section 18 above, or
(c)to a surcharge under section 19 above,
the Commissioners may [F2subject to subsection (1A) below] assess the amount due by way of penalty, interest or surcharge, as the case may be, and notify it to him accordingly; and the fact that any conduct giving rise to a penalty under any of sections 13 to [F117A] above may have ceased before an assessment is made under this section shall not affect the power of the Commissioners to make such an assessment.
[F3(1A)Where a person is liable to a penalty under section17above for any failure to comply with such a requirement as is referred to in subsection (1)(b) to (e) of that section, no assessment shall be made under this section of the amount due from him by way of such penalty unless, within the period of two years preceding the assessment, the Commissioners have issued him with a written warning of the consequences of a continuing failure to comply with that requirement.]
(2)In the case of the penalties, interest and surcharge referred to in the following paragraphs, the assessment under this section shall be of an amount due in respect of the prescribed accounting period which in the paragraph concerned is referred to as “the relevant period”,—
(a)in the case of a penalty under section 13 above relating to the evasion of tax, the relevant period is the prescribed accounting period for which the tax evaded was due;
(b)in the case of a penalty under section 13 above relating to the obtaining of a payment under section 14(5) of the principal Act, the relevant period is the prescribed accounting period in respect of which the payment was obtained;
(c)in the case of a penalty under section 14 above, the relevant period is the prescribed accounting period for which liability to tax was understated or, as the case may be, for which entitlement to a payment under section 14(5) of the principal Act was overstated;
(d)in the case of interest under section 18 above, the relevant period is the prescribed accounting period in respect of which the tax (or amount assessed as tax) was due; and
(e)in the case of a surcharge under section 19 above, the relevant period is the prescribed accounting period in respect of which the taxable person is in default and in respect of which the surcharge arises.
(3)In any case where the amount of any penalty, interest or surcharge falls to be calculated by reference to tax which was not paid at the time it should have been and that tax (or the supply which gives rise to it) cannot be readily attributed to any one or more prescribed accounting periods, it shall be treated for the purposes of the principal Act and this Part of this Act as tax due for such period or periods as the Commissioners may determine to the best of their judgment and notify to the person liable for the tax and penalty, interest or surcharge.
(4)Where a person is assessed under this section to an amount due by way of any penalty, interest or surcharge falling within subsection (2) above and is also assessed under subparagraph (1), subparagraph (2) or subparagraph (6) of paragraph 4 of Schedule 7 to the principal Act for the prescribed accounting period which is the relevant period under subsection (2) above, the assessments may be combined and notified to him as one assessment, but the amount of the penalty, interest or surcharge shall be separately identified in the notice.
[F4(4A)An assessment to a penalty under section 15 above by virtue of subsection (1)(aa) of that section may be combined with an assessment under paragraph 4A of Schedule 7 to the principal Act and the two assessments notified together but the amount of the penalty shall be separately identified in the notice.]
(5)In the case of an amount due by way of penalty under section 17 [F5or section 17A] or interest under section 18 above—
(a)a notice of assessment under this section shall specify a date, being not later than the date of the notice, to which the aggregrate amount of the penalty or, as the case may be, the amount of interest which is assessed is calculated; and
(b)if the penalty or interest continues to accrue after that date, a further assessment or assessments may be made under this section in respect of amounts which so accrue.
(6)If, within such period as may be notified by the Commissioners to the person liable to a penalty under section 17 [F6or section 17A] above or for interest under section 18 above,—
(a)a failure [F7or default falling within section 17(1) or section 17A(1) above] is remedied, or
(b)the tax or other amount referred to in section 18(1) above is paid,
it shall be treated for the purposes of section 17 [F6section 17A] or, as the case may be, section 18 above is remedied or paid on the date specified as mentioned in subsection (5)(a) above.
(7)If an amount is assessed and notified to any person under this section, then unless, or except to the extent that, the assessment is withdrawn or reduced, that amount shall be recoverable as if it were tax due from him.
(8)Subparagraph (10) of paragraph 4 of Schedule 7 to the principal Act (notification to personal representatives etc.) shall apply for the purposes of this section as it applies for the purposes of that paragraph.
Textual Amendments
F1Words in s. 21(1) substituted (1.12.1992 for certain purposes and 1.1.1993 insofar as not already in force) by Finance Act 1992 (c. 48), s. 14(2), Sch. 3 Pt. II para. 84(1); S.I. 1992/2979, art.4, Sch. Pt. II and S.I. 1992/3261, art.3, Sch.
F2Words inserted by Finance Act 1988 (c. 39, SIF 40:2), s. 19(3)(5)
F3S. 21(1A) inserted by Finance Act 1988 (c. 39, SIF, 40:2), s. 19(3)(5)
F4S. 21(4A) inserted (1.12.1992 for certain purposes and 1.1.1993 insofar as not already in force) by Finance Act 1992 (c. 48), s. 14(2), Sch. 3 Pt. II para. 84(2); S.I. 1992/2979, art.4, Sch. Pt. II and S.I. 1992/3261, art. 3, Sch.
F5Words in s. 21(5) inserted (1.12.1992 for certain purposes and 1.1.1993 insofar as not already in force) by Finance (No. 2) Act 1992 (c. 48), s. 14(2), Sch. 3 Pt. II para. 84(3); S.I. 1992/2979, art. 4, Sch. Pt.II and S.I. 1992/3261, art.3, Sch.
F6Words in s. 21(6) inserted (1.12.1992 for certain purposes and 1.1.1993 insofar as not already in force) by Finance Act 1992 (c. 48), s. 14(2), Sch. 3 Pt. II para. 84(4)(a)(c); S.I. 1992/2979, art.4, Sch. Pt. II and S.I. 1992/3261, art.3, Sch.
F7Words in 21(6)(a) substituted (1.12.1992 for certain purposes and 1.1.1993 insofar as not already in force) by Finance Act 1992 (c. 48), s. 14(2), Sch. 3 Pt. II para. 84(4)(b); S.I. 1992/2979, art.4, Sch. Pt. II and S.I. 1992/3261, art. 3, Sch.
Modifications etc. (not altering text)
C2S. 21 extended by Finance Act 1986 (c. 41, SIF 40:2), s. 14(3)
(1)Subject to the following provisions of this section, an assessment—
(a)under any provision of paragraph 4 [F8or paragraph 4A] of Schedule 7 to the principal Act, or
(b)under section 21 above,
shall not be made more than six years after the end of the prescribed accounting period or importation [F8or acquisition] concerned or, in the case of an assessment under section 21 above of an amount due by way of a penalty which is not among those referred to in subsection (2) of that section, six years after the event giving rise to the penalty.
(2)Subject to subsection (5) below, an assessment under section 21 above of an amount due by way of any penalty, interest or surcharge referred to in subsection (2) of that section may be made at any time before the expiry of the period of two years beginning
[F9(a)in the case of a penalty under section 14B or section 17A above, with the time when facts sufficient in the opinion of the Commissioners to indicate, as the case may be—
(i)that the statement in question contained a material inaccuracy; or
(ii)that there had been a default within the meaning of section 17A(1) above,
came to the Commissioners knowledge; and
(b)in any other case, with the time]
when the amount of tax due for the prescribed accounting period concerned has been finally determined.
(4)Subject to subsection (5) below, if tax has been lost—
(a)as a result of conduct falling within section 13(1) above or for which a person has been convicted of fraud, or
(b)in circumstances giving rise to liability to a penalty under section 15 above,
an assessment may be made as if, in subsection (1) above, each reference to six years were a reference to twenty years.
(5)Where, after a person’s death, the Commissioners propose to assess a sum as due by reason of some conduct (howsoever described) of the deceased, including a sum due by way of penalty, interest or surcharge,—
(a)the assessment shall not be made more than three years after the death; and
(b)if the circumstances are as set out in subsection (4) above, the modification of subsection (1) above contained in that subsection shall not apply but any assessment which (from the point of view of time limits) could have been made immediately after the death may be made at any time within three years after it.
(6)Subparagraphs (7) and (8) of paragraph 4 of Schedule 7 to the principal Act (which are superseded by the preceding provisions of this section) shall cease to have effect.
(7)If, otherwise than in circumstances falling within subparagraph (5)(b) of paragraph 4 [F10or sub-paragraph (2)(b) of paragraph 4A] of Schedule 7 to the principal Act (further evidence relating to an assessment under F11. . . that paragraph), it appears to the Commissioners that the amount which ought to have been assessed in an assessment under any provision of that paragraph or under section 21 above exceeds the amount which was so assessed, then,—
(a)under the like provision as that assessment was made, and
(b)on or before the last day on which that assessment could have been made,
the Commissioners may make a supplementary assessment of the amount of the excess and shall notify the person concerned accordingly.
Textual Amendments
F8Words in s. 22(1)(a) inserted (1.12.1992 for certain purposes and 1.1.1993 insofar as not already in force) by Finance (No. 2) Act 1992 (c. 48), s. 14(2), Sch. 3 Pt. II para. 85(1)(a)(b); S.I. 1992/2979, art.4, Sch. Pt. II and S.I. 1992/3261, art. 3, Sch.
F9S. 22(2)(a)(b) inserted (1.12.1992 for certain purposes and 1.1.1993 insofar as not already in force) by Finance Act (No. 2) 1992 (c. 48), s. 14(2), Sch. 3 Pt. II para. 85(2); S.I. 1992/2979, art.4, Sch. Pt. II and S.I. 1992/3261, art.3, Sch.
F10Words in s. 22(7) inserted (1.12.1992 for certain purposes and 1.1.1993 insofar as not already in force) by Finance (No. 2) Act 1992 (c. 48), s. 14(2), Sch. 3 Pt. II para. 85(3); S.I. 1992/2979, art.4, Sch. Pt. II and S.I. 1992/3261, art. 3, Sch.
F11Words in s. 22(7) repealed (16.7.1992 subject as mentioned below) by Finance (No. 2) Act 1992 (c. 48), s. 14(3), Sch. 18 Pt.V (by the note at the end of Sch. 18 Pt. V it is provided that the repeals in Pt. V come into force in accordance with s. 14(3) of that 1992 Act).
Schedule 7 to the principal Act (administration, collection and enforcement) shall be amended in accordance with Schedule 7 to this Act.