[F181H(1)This paragraph applies if HMRC decide—U.K.
(a)that requirements of Parts 2 to 9 of this Schedule—
(i)are not met in relation to the SIP, or
(ii)have not been met in relation to the SIP, and
(b)that the situation is, or was, so serious that this paragraph should apply.
(2)If this paragraph applies—
(a)the SIP is not to be a Schedule 2 SIP with effect from—
(i)such relevant time as is specified in the closure notice, or
(ii)if no relevant time is specified, the time of the giving of the closure notice, and
(b)the company is liable for a penalty of an amount decided by HMRC.
(3)Sub-paragraph (2)(a) does not affect the operation of the SIP code in relation to shares appropriated to, or acquired on behalf of, an individual under the SIP before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).
(4)In particular, if the SIP was a Schedule 2 SIP when the shares were appropriated to, or acquired on behalf of, the individual, the SIP is to continue to be a Schedule 2 SIP in relation to those shares.
(5)The penalty under sub-paragraph (2)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of—
(a)the total income tax for which participants in the SIP have not been liable, or will not be liable in the future, and
(b)the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future,
in consequence of the SIP having been a Schedule 2 SIP at any relevant time before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).
(6)The liabilities covered by sub-paragraph (5) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraphs (3) and (4).
(7)In this paragraph “relevant time” means any time before the giving of the closure notice when requirements of Parts 2 to 9 of this Schedule were not met in relation to the SIP.]
Textual Amendments
F1Sch. 2 Pt. 10 substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 28, 89 (with Sch. 8 paras. 90-96)