xmlns:atom="http://www.w3.org/2005/Atom" xmlns:atom="http://www.w3.org/2005/Atom"

SCHEDULES

SCHEDULE 41U.K.Penalties: failure to notify and certain VAT and excise wrongdoing

Modifications etc. (not altering text)

C1Sch. 41 modified (with effect in accordance with s. 42(2), Sch. 12 para. 29(1) of the amending Act) by Finance Act 2018 (c. 3), Sch. 12 paras. 33, 34

C2Sch. 41 applied (with modifications) (22.7.2020) by Finance Act 2020 (c. 14), Sch. 16 para. 11(6) (with Sch. 16 para. 11(7))

C3Sch. 41 applied (with modifications) (22.7.2020) by Finance Act 2020 (c. 14), Sch. 16 para. 13

Potential lost revenueU.K.

7(1)“The potential lost revenue” in respect of a failure to comply with a relevant obligation is as follows.U.K.

[F1(1A)In the case of an obligation under section 7 of TMA 1970 which arises by virtue of subsection (1B) of that section, the potential lost revenue is so much of any income tax or capital gains tax to which P is liable in respect of the tax year in question as is, by reason of the failure to comply with the obligation—

(a)where the period specified in subsection (1C)(b)(ii) of that section applies and ends after the relevant date, unpaid at the end of that period, or

(b)in any other case, unpaid on the relevant date.

(1B)For the purposes of sub-paragraph (1A) the relevant date is—

(a)31 January following the tax year, or

(b)if, after that date, HMRC refund a payment on account in respect of the tax year to P, the day after the refund is issued.]

(2)In the case of a relevant obligation relating to income tax or capital gains tax and a tax year [F2 (not falling within sub-paragraph (1A))], the potential lost revenue is so much of any income tax or capital gains tax to which P is liable in respect of the tax year as by reason of the failure is unpaid on 31 January following the tax year.

(3)In the case of a relevant obligation relating to corporation tax and an accounting period, the potential lost revenue is (subject to sub-paragraph (4)) so much of any corporation tax to which P is liable in respect of the accounting period as by reason of the failure is unpaid 12 months after the end of the accounting period.

(4)In computing the amount of that tax no account shall be taken of any relief under [F3section 458 of CTA 2010] (relief in respect of repayment etc of loan) which is deferred under [F4subsection (5)] of that section.

[F5(4A)In the case of a relevant obligation relating to diverted profits tax, the potential lost revenue is the amount of diverted profits tax for which P would be liable at the end of the period of 6 months beginning immediately after the accounting period assuming—

(a)a charge to diverted profits tax had been imposed on P on the taxable diverted profits arising to P for the accounting period, and

(b)that tax was required to be paid before the end of that period of 6 months.]

[F6(4B)In the case of a relevant obligation relating to digital services tax and an accounting period, the potential lost revenue is so much of any digital services tax payable by members of the group for the accounting period as by reason of the failure is unpaid 12 months after the end of the accounting period.]

F7(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)In the case of [F8a] relevant obligation relating to value added tax, the potential lost revenue is the amount of the value added tax (if any) for which P is, or but for any exemption from registration would be, liable for the relevant period (see sub-paragraph (7)) F9....

(7)“The relevant period” is—

(a)in relation to a failure to comply with paragraph 14(2) or (3) of Schedule 1 to VATA 1994 F10... or paragraph 7(2) or (3) of Schedule 3A to that Act, the period beginning on the date of the change or alteration concerned and ending on the date on which HMRC received notification of, or otherwise became fully aware of, that change or alteration, and

(b)in relation to a failure to comply with an obligation under any other provision, the period beginning on the date with effect from which P is required in accordance with that provision to be registered and ending on the date on which HMRC received notification of, or otherwise became fully aware of, P's liability to be registered.

F11(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F12(8A)In the case of a relevant obligation under section 47 of FA 1996 (which relates to landfill tax), the potential lost revenue is the amount of tax (if any) for which P is liable for the period—

(a)beginning with the date with effect from which P is required in accordance with that section to be registered or (as the case may be) from which the Commissioners may register P under that section, and

(b)ending with the day on which HMRC received notification of, or otherwise became fully aware of, P's liability to be registered or (as the case may be) the Commissioners' power to register P.]

(9)In the case of a relevant obligation under any provision relating to insurance premium tax, [F13plastic packaging tax,] aggregates levy, climate change levy F14... or air passenger duty, the potential lost revenue is the amount of the tax (if any) for which P is liable for the period—

(a)beginning on the date with effect from which P is required in accordance with that provision to be registered, and

(b)ending on the date on which HMRC received notification of, or otherwise became fully aware of, P's liability to be registered.

(10)In the case of a failure to comply with a relevant obligation relating to any other tax, the potential lost revenue is the amount of any tax which is unpaid by reason of the failure.

Textual Amendments

F1Sch. 41 para. 7(1A)(1B) inserted (17.7.2013) (with effect in accordance with Sch. 51 para. 9 of the amending Act) by Finance Act 2013 (c. 29), Sch. 51 para. 6(2)

F2Words in Sch. 41 para. 7(2) inserted (17.7.2013) (with effect in accordance with Sch. 51 para. 9 of the amending Act) by Finance Act 2013 (c. 29), Sch. 51 para. 6(3)

F3Words in Sch. 41 para. 7(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 583(a) (with Sch. 2)

F4Words in Sch. 41 para. 7(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 583(b) (with Sch. 2)

F5Sch. 41 para. 7(4A) inserted (with effect in accordance with s. 116(1) of the amending Act) by Finance Act 2015 (c. 11), s. 104(6)

F12Sch. 41 para. 7(8A) inserted (with effect in accordance with s. 42(2), Sch. 12 para. 29(1) of the amending Act) by Finance Act 2018 (c. 3), Sch. 12 para. 27(6)(a)

F13Words in Sch. 41 para. 7(9) inserted (10.12.2021 for specified purposes, 1.4.2022 in so far as not already in force and with effect in accordance with s. 85(1)(b) of the amending Act) by Finance Act 2021 (c. 26), s. 85(1)(a), Sch. 15 para. 1(3); S.I. 2021/1409, regs. 3, 4

F14Words in Sch. 41 para. 7(9) omitted (with effect in accordance with s. 42(2), Sch. 12 para. 29(1) of the amending Act) by virtue of Finance Act 2018 (c. 3), Sch. 12 para. 27(6)(b)

Modifications etc. (not altering text)

C5Sch. 41 para. 7 modified (17.12.2020 for specified purposes, 31.12.2020 in so far as not already in force) by 1994 c. 23, Sch. 9ZA para. 78(4)(5) (as inserted by Taxation (Post-transition Period) Act 2020 (c. 26), s. 11(1)(e), Sch. 2 para. 2 (with s. 3(4), Sch. 2 para. 7(7)-(10)); S.I. 2020/1642, reg. 9)

Commencement Information

I1Sch. 41 para. 7 in force at 1.4.2010 with effect in accordance with art. 3 by S.I. 2009/511, art. 2

8U.K.In the case of the making of an unauthorised issue of an invoice showing VAT, the potential lost revenue is the amount shown on the invoice as value added tax or the amount to be taken as representing value added tax.

Commencement Information

I2Sch. 41 para. 8 in force at 1.4.2010 with effect in accordance with art. 3 by S.I. 2009/511, art. 2

9U.K.In the case of—

(a)the doing of an act which enables HMRC to assess an amount of duty as due under a relevant excise provision, or

(b)supplying a product knowing that it will be used in a way which enables HMRC to assess an amount as duty due from another person under a relevant excise provision,

the potential lost revenue is the amount of the duty which may be assessed as due.

Commencement Information

I3Sch. 41 para. 9 in force at 1.4.2010 with effect in accordance with art. 3 by S.I. 2009/511, art. 2

[F159AU.K.In the case of the doing of an act which enables HMRC to assess an amount of landfill tax as due under section 50A of FA 1996, the potential lost revenue is the amount of the tax which may be assessed as due.]

Textual Amendments

F15Sch. 41 para. 9A inserted (with effect in accordance with s. 42(2), Sch. 12 para. 29(1) of the amending Act) by Finance Act 2018 (c. 3), Sch. 12 para. 27(7)

10U.K.In the case of acquiring possession of, or being concerned in dealing with, goods the payment of duty on which is outstanding and has not been deferred [F16or (as the case may be) chargeable soft drinks in respect of which a payment of soft drinks industry levy is due and payable and has not been paid], the potential lost revenue is an amount equal to the amount of duty due on the goods.

Textual Amendments

Commencement Information

I4Sch. 41 para. 10 in force at 1.4.2010 with effect in accordance with art. 3 by S.I. 2009/511, art. 2

11(1)In calculating potential lost revenue in respect of a relevant act or failure on the part of P no account is to be taken of the fact that a potential loss of revenue from P is or may be balanced by a potential over-payment by another person (except to the extent that an enactment requires or permits a person's tax liability to be adjusted by reference to P's).U.K.

(2)In this Schedule “a relevant act or failure” means—

(a)a failure to comply with a relevant obligation,

(b)the making of an unauthorised issue of an invoice showing VAT,

(c)the doing of an act which enables HMRC to assess an amount of duty as due under a relevant excise provision or supplying a product knowing that it will be used in a way which enables HMRC to assess an amount as duty due from another person under a relevant excise provision, or

(d)acquiring possession of, or being concerned in dealing with, goods the payment of duty on which is outstanding and has not been deferred [F17or (as the case may be) chargeable soft drinks in respect of which a payment of soft drinks industry levy is due and payable and has not been paid].

Textual Amendments

Modifications etc. (not altering text)

Commencement Information

I5Sch. 41 para. 11 in force at 1.4.2010 with effect in accordance with art. 3 by S.I. 2009/511, art. 2