Finance Act 1994

15 (1) This paragraph applies if a person fails to comply with— U.K.

(a) a requirement imposed by regulations made under section 54 of this Act to pay the tax due in respect of any period within the time required by the regulations, or

(b) a requirement imposed by regulations made under that section to furnish a return in respect of any period within the time required by the regulations;

and sub-paragraphs (2) and (3) below shall have effect subject to sub-paragraphs (5) and (6) below and paragraph 25(7) below.

(2) The person shall be liable to a penalty equal to 5 per cent. of the tax due or, if it is greater, to a penalty of £250.

(3) The person—

(a) shall be liable, in addition to an initial penalty under sub-paragraph (2) above, to a penalty of £20 for every relevant day when he fails to pay the tax or furnish the return, but

(b) shall not in respect of the continuation of the failure be liable to further penalties under sub-paragraph (2) above;

and a relevant day is any day falling after the time within which the tax is required to be paid or the return is required to be furnished.

(4) For the purposes of sub-paragraph (2) above the tax due—

(a) shall, if the person concerned has furnished a return, be taken to be the tax shown in the return as that for which he is accountable in respect of the period in question, and

(b) shall, in any other case, be taken to be such tax as has been assessed for that period and notified to him under section 56(1) of this Act.

(5) A failure falling within sub-paragraph (1) or (3) above shall not give rise to liability to a penalty under this paragraph if the person concerned satisfies the Commissioners or, on appeal, an appeal tribunal that there is a reasonable excuse for the failure.

(6) Where, by reason of a failure falling within sub-paragraph (1) or (3) above—

(a) a person is convicted of an offence (whether under this Part of this Act or otherwise), or

(b) a person is assessed to a penalty under paragraph 12 above,

that failure shall not also give rise to liability to a penalty under this paragraph.

(7) If it appears to the Treasury that there has been a change in the value of money since the passing of this Act or, as the case may be, the last occasion when the power conferred by this sub-paragraph was exercised, they may by order substitute for the sums for the time being specified in sub-paragraphs (2) and (3) above such other sums as appear to them to be justified by the change.

(8) An order under sub-paragraph (7) above shall not apply in relation to a failure which began before the date on which the order comes into force.