Finance Act 2013

Amendments to Schedule 56 to FA 2009: penalty for failure to make payments on time U.K.

10 U.K. Schedule 56 (penalty for failure to make payments on time) to FA 2009 is amended in accordance with paragraphs 11 to 14.

11 U.K. In paragraph 1 (penalty for failure to pay tax), in sub-paragraph (4), for the words from “the date on which” to the end substitute “ the day after the date specified in or for the purposes of column 4 of the Table in relation to that amount. ”

12 (1) Paragraph 6 (amount of penalty: PAYE and CIS amounts) is amended as follows. U.K.

(2) For sub-paragraph (1) substitute—

“(1) P is liable to a penalty under this paragraph, in relation to each tax, each time that P makes a default in relation to a tax year.”

(3) In sub-paragraph (2)—

(a) in the opening words, after “default” insert “ in relation to a tax year ”;

(b) in paragraph (a), at the end insert “ of tax payable in relation to the tax year ”;

(c) in paragraph (b), at the end insert “ payable in relation to the tax year ”;

(d) in paragraph (c), at the end insert “ payable in relation to the tax year ”;

(e) in paragraph (d), at the end insert “ and due for the tax year ”.

(4) For sub-paragraphs (3) to (7) substitute—

“(3) But where a failure to make one of those payments (or to pay an amount comprising two or more of those payments) would, apart from this sub-paragraph, constitute the first default in relation to a tax year, that failure does not count as a default in relation to that year for the purposes of a penalty under this paragraph.

(4) The amount of the penalty for a default made in relation to a tax year is determined by reference to—

(a) the amount of the tax comprised in the default, and

(b) the number of previous defaults that P has made in relation to the same tax year.

(5) If the default is P's 1st, 2nd or 3rd default in relation to the tax year, P is liable, at the time of the default, to a penalty of 1% of the amount of tax comprised in the default.

(6) If the default is P's 4th, 5th or 6th default in relation to the tax year, P is liable, at the time of the default, to a penalty of 2% of the amount of tax comprised in the default.

(7) If the default is P's 7th, 8th or 9th default in relation to the tax year, P is liable, at the time of the default, to a penalty of 3% of the amount of tax comprised in the default.

(7A) If the default is P's 10th or subsequent default in relation to the tax year, P is liable, at the time of the default, to a penalty of 4% of the amount of tax comprised in the default.”

(5) In sub-paragraph (8), for paragraph (b) substitute—

“(b) a previous default counts for the purposes of sub-paragraphs (5) to (7A) even if it is remedied before the time of the default giving rise to the penalty.”

(6) After sub-paragraph (8) insert—

“(8A) Regulations made by the Commissioners for Her Majesty's Revenue and Customs may specify—

(a) circumstances in which, for the purposes of sub-paragraph (2), a payment of less than the full amount may be treated as a payment in full;

(b) circumstances in which sub-paragraph (3) is not to apply.

(8B) Regulations under sub-paragraph (8A) may—

(a) make different provision for different cases, and

(b) include incidental, consequential and supplementary provision.”

13 U.K. After paragraph 9 insert—

“Interaction with other penalties and late payment surcharges U.K.

9A In the application of the following provisions, no account shall be taken of a penalty under this Schedule—

(a) section 97A of TMA 1970 (multiple penalties),

(b) paragraph 12(2) of Schedule 24 to FA 2007 (interaction with other penalties), and

(c) paragraph 15(1) of Schedule 41 to FA 2008 (interaction with other penalties).”

14 (1) Paragraph 11 (assessment of penalty) is amended as follows. U.K.

(2) For sub-paragraph (4A) substitute—

“(4A) If an assessment in respect of a penalty is based on an amount of tax due or payable that is found by HMRC to be excessive, HMRC may by notice to P amend the assessment so that it is based upon the correct amount.

(4B) An amendment made under sub-paragraph (4A)—

(a) does not affect when the penalty must be paid;

(b) may be made after the last day on which the assessment in question could have been made under paragraph 12.”

(3) Omit sub-paragraph (5).