PART X PENALTIES, ETC.

F193 Failure to make return for income tax and capital gains tax.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F293A Failure to make partnership return.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F394 Failure to make return for corporation tax.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F495 Incorrect return or accounts for income tax or capital gains tax.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F595A Incorrect partnership return or accounts.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F696Incorrect return or accounts for corporation tax.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F797 Incorrect return or accounts: supplemental.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F897AA Failure to produce documents under section 19A.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F997ATwo or more tax-geared penalties in respect of the same tax.

Where two or more penalties—

(a)

are incurred by any person and fall to be determined by reference to any income tax or capital gains tax with which he is chargeable for a year of assessment; F10...

F10(b)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

each penalty after the first shall be so reduced that the aggregate amount of the penalties, so far as determined by reference to any particular part of the tax, does not exceed whichever is or, but for this section, would be the greater or greatest of them, so far as so determined.

98 Special returns, etc.

(1)

F11Subject to F12the provisions of this section and section 98A below, where any person—

(a)

has been required, by a notice served under or for the purposes of any of the provisions specified in the first column of the Table below, to deliver any return or other document, to furnish any particulars, to produce any document, or to make anything available for inspection, and he fails to comply with the notice, or

(b)

fails to furnish any information, give any certificate or produce any document or record in accordance with any of the provisions specified in the second column of the Table below,

he shall be liable, subject to F11subsections (3) and (4) below—

(i)

to a penalty not exceeding £300, and

(ii)

if the failure continues after a penalty is imposed under paragraph (i) above, to a further penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which the penalty under paragraph (i) above was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).

(2)

F13Subject to section 98A below, where a person fraudulently or negligently furnishes, gives, produces or makes any incorrect information, certificate, document, record or declaration of a kind mentioned in any of the provisions specified in either column of the Table below, he shall be liable to a penalty not exceeding F13£3000.

F14(3)

No penalty shall be imposed under subsection (1) above in respect of a failure within paragraph (a) of that subsection at any time after the failure has been remedied.

(4)

No penalty shall be imposed under paragraph (ii) of subsection (1) above in respect of a failure within paragraph (b) of that subsection at any time after the failure has been remedied.

F15(4A)

If—

(a)

a failure to comply with F16Chapter 15 or 16 of Part 15 of ITA 2007 arises from a person’s failure to deliver an account, or show the amount, of a payment, and

(b)

the payment is within subsection (4B)F17, (4D)F18, (4DA) or (4E) below,

subsection (1) above shall have effect as if for “£300” there were substituted “£3,000” and as if for “£60” there were substituted “£600”.

(4B)

A payment is within this subsection if—

F19(a)

the payment is made by a company, local authority or qualifying partnership (within the meaning of section 932 of ITA 2007) without an amount representing income tax on the payment being deducted from it,

(b)

at the time the payment is made, the company, authority or partnership—

(i)

does not believe that the payment is an excepted payment for the purposes of Chapter 11 of Part 15 of ITA 2007 (payments between companies etc: exception from duties to deduct), or

(ii)

if it does so believe, cannot reasonably do so,

(c)

the payment is one from which tax is deductible under Part 15 of ITA 2007 unless the company, authority or partnership reasonably believes that it is an excepted payment for the purposes of Chapter 11 of that Part, and

(d)

the payment is not an excepted payment at the time the payment is made.

F20(4C)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F21(4D)

A payment is within this subsection if—

(a)

it is a payment from which a sum representing income tax must be deducted under Chapter 6 (deduction from annual payments and patent royalties) or 7 (deduction from other payments connected with intellectual property) of Part 15 of ITA 2007,

(b)

a company, purporting to rely on section 911 of that Act (double taxation arrangements: deduction at treaty rate), deducts less from the payment than required by those Chapters, and

(c)

at the time the payment is made the payee (as defined in section 913 of that Act) is not entitled to relief under double taxation arrangements (as defined in section 1023 of that Act) and the company—

(i)

does not believe that it is entitled to such relief, or

(ii)

if it does so believe, cannot reasonably do so.

F22(4DA)

A payment is within this subsection if—

(a)

it is a payment from which a sum representing income tax must be deducted under Chapter 6 (deduction from annual payments and patent royalties) or 7 (deduction from other payments connected with intellectual property) of Part 15 of ITA 2007,

(b)

a company, purporting to rely on section 914 of ITA 2007 (EU companies: discretion to make payment gross), makes the payment without deducting a sum representing income tax, and

(c)

at the time the payment is made the payment is not exempt from income tax as a result of section 758 of ITTOIA 2005 (exemption for certain interest and royalty payments) and the company—

(i)

does not believe that the payment is so exempt, or

(ii)

if it does so believe, cannot reasonably do so.

F23(4E)

A payment is within this subsection if—

(a)

it is an interest distribution made to a unit holder by the trustees of an authorised unit trust,

(b)

the trustees, in purported reliance on the reputable intermediary condition being fulfilled with respect to the unit holder, do not comply with the obligation under F24section 874 of ITA 2007 to make a deduction from the interest distribution,

(c)

that obligation would apply if that condition were not so fulfilled, and

(d)

the trustees did not believe that the unit holder was not ordinarily resident in the United Kingdom or could not reasonably have so believed (so that that condition was not so fulfilled).

Expressions used in this subsection have the same meaning as in F25regulations made under section 17(3) of the Finance (No. 2) Act 2005 (as at 1st April 2006, see the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964)).

F26(5)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F27TABLE

1.

2.

Part III of this Act, F28. . .

In the principal Act—

F29regulations under section 59E of this Act;

F30. . .

F31. . .

F32. . .

F33. . .

F34. . .

In the principal Act—

F35. . .

F36. . .

F35. . .

F37. . .

F38. . .

F39. . .

F40. . .

F35. . .

F41...

F35. . .

F42. . .

F43. . .

F43. . .

F44. . .

F45. . .

F46. . .

F47. . .

F46. . .

F48. . .

F46. . .

F48. . .

F49. . .

F48. . .

F46. . .

F48. . .

F49. . .

section 310(1), (2)F50, (2A) and (3);

section 310(4) and (5);

F51. . .

F52. . .

F53. . .

regulations under section 333;

Regulations under section 333;

F54. . .

F54. . .

F55regulations under section 431E(1) F56... ;

F57. . .

F58. . .

section 375(5);

F59. . .

F60regulations under section 431E(1) F56... ;

F61. . .

F62regulations under section 444BB;

F63. . .

F62regulations under section 444BD;

F64. . .

F65. . .

F66. . .

F67. . .

F68. . .

F69. . .

F70. . .

F71. . .

F72. . .

F73section 552;

F74. . .

F75regulations under section 552ZA(6);

F76. . .

F77. . .

F78. . .

F79. . .

F78. . .

F80. . .

F78. . .

F81. . .

F78. . .

F78. . .

F78. . .

F78. . .

F78. . .

F78. . .

F82. . .

F78. . .

F83. . .

F78. . .

F49. . .

F78. . .

F49. . .

F84. . .

F49. . .

F85section 76ZE(4);

F86. . .

F87. . .

F88. . .

F89. . .

F90. . .

F91. . .

F92. . .

F91. . .

F49. . .

regulations under paragraph 7 of Schedule 14;

F93. . .

Schedule 15, paragraph 14(4);

F94. . .

F95. . .

F49. . .

F96. . .

F46. . .

F97. . .

F87. . .

Regulations under section F98151 of the 1992 Act.

F49. . .

F99Sections F100... F10145B(5) and (6),F10245G(4) and (5)F103, 45I(5) and (6), 118 to 120, 145(2) and (3) and 203 of the Capital Allowances Act

F46. . .

Regulations 16 and 17 of the Income Tax (Interest Relief) Regulations 1982.

F49. . .

F104. . .

F105. . .

F106. . .

F107. . .

F108. . .

F109. . .

F110. . .

F111. . .

F112. . .

F113. . .

F114. . .

F115. . .

F116. . .

F117. . .

F118. . .

F119. . .

F120paragraph 12 of Schedule 4ZA to the 1992 Act

F121. . .

F122Paragraphs 2 to 6 of Schedule 5A to the 1992 Act.

F123. . .

F124regulations under section 73 of the Finance Act 1995;

Regulations under section F125151 of the 1992 Act.

F126. . .

Paragraph F1272(9) of Schedule 1 to the 1992 Act.

F126. . .

F128. . .

F129. . .

Section F13098 of the 1992 Act.

F131. . .

F132. . .

F133paragraph 64 or 65 of Schedule 15 to the Finance Act 2000

F134. . .

F135Paragraph 93(2) of Schedule 22 to the Finance Act 2000

F136. . .

F137Paragraph 129 of Schedule 22 to the Finance Act 2000

F138. . .

F139paragraph 6 of Schedule 34 to the Finance Act 2002

F140[Section 73 of the Finance Act 1989 ]

F141paragraph 7 of Schedule 35 to the Finance Act 2002

F46. . .

F142. . .

F136. . .

F48. . .

F143. . .

F144Section 421J(3) of ITEPA 2003.

F136. . .

F145Regulations under section 589 of ITEPA 2003.

F146Paragraph 1(7) of Schedule 1 to the 1992 Act.

F145Regulations under section 715 of ITEPA 2003.

F147. . .

F145PAYE regulations.

F148. . .

F145Paragraph 52 of Schedule 5 to ITEPA 2003.

F149. . .

F150. . .

F151. . .

F152Regulations under section 65(2), 69(1), 70(1)(a) or (c) or 71 of the Finance Act 2004.

F153paragraph 66 of Schedule 15 to the Finance Act 2000

F154regulations under section 251(1)(a) or (4) of the Finance Act 2004;

F155. . .

F156Section 75(4) of ITTOIA 2005.

F157paragraph 10 of Schedule 34 to the Finance Act 2002

F156Regulations under Chapter 3 of Part 6 of ITTOIA 2005.

F158paragraph 11 of Schedule 35 to the Finance Act 2002

F159section 37(3) of the Finance Act 2005;

F160. . .

F159section 37(6) of the Finance Act 2005;

F161Section 421J(4) of ITEPA 2003.

F162Section 106 of FA 2006 as modified by Schedule 17 to that Act.

F163. . .

F162Section 116 of FA 2006.

F164Regulations under section 715 of ITEPA 2003.

F162Regulations under section 116 of FA 2006.

F164Paragraph 93 of Schedule 2 to ITEPA 2003.

F165. . .

F164Paragraph 45 of Schedule 3 to ITEPA 2003.

F162Section 130 of FA 2006.

F164Paragraph 33 of Schedule 4 to ITEPA 2003.

F166sections 240 and 241 of ITA 2007;

F164Paragraph 51 of Schedule 5 to ITEPA 2003.

F166section 271(1) of ITA 2007;

F167. . .

F166regulations under Chapter 5 of Part 6 of ITA 2007;

F168Regulations under section 70(3) of the Finance Act 2004.

F166section 373 of ITA 2007;

F169. . .

F166regulations under section 871(1) of ITA 2007;

F169. . .

F166Chapter 15 of Part 15 of ITA 2007;

F169. . .

F166Chapter 16 of Part 15 of ITA 2007;

F170. . .

F166regulations under section 969(1) of ITA 2007;

F171section 401B of ITTOIA 2005.

F166regulations under section 971(1) of ITA 2007;

F171section 421A of ITTOIA 2005.

F166regulations under section 973(1) of ITA 2007.

F170. . .

F172Section 75(4) of CTA 2009.

F173Regulations under Chapter 3 of Part 6 of ITTOIA 2005.

F174paragraph 4 of Schedule 17 to FA 2009.

F175section 40(1) of the Finance Act 2005

F176section 260 of CTA 2010.

F177regulations under section 17(3) of the Finance (No. 2) Act 2005

F176section 1046(1) to (4) of CTA 2010.

F178sections 242 and 243(1) and (2) of ITA 2007;

F176section 1095 of CTA 2010.

F179. . .

F176section 1096 of CTA 2010.

F178regulations under Chapter 5 of Part 6 of ITA 2007;

F176section 1052(1) to (3) of CTA 2010.

F180. . .

F176section 1101(1), (2) and (4) of CTA 2010.

F181. . .

F182Section 228 of TIOPA 2010.

F178section 748(1) and (2) of ITA 2007;

F178section 771 of ITA 2007;

F181. . .

F181. . .

F178regulations under section 871(1) of ITA 2007;

F178regulations under section 969(1) of ITA 2007;

F178regulations under section 971(1) of ITA 2007;

F183. . .

F184. . .

F184. . .

F185. . .

F184. . .

F184. . .

F186. . .

F187Section 31(3) and (4) of CTA 2010.

F188Section 465(3) and (4) of CTA 2010.

F189. . .

F190section 832 of CTA 2010.

F189. . .

F190section 1052(4) and (5) of CTA 2010.

F189. . .

F190section 1101(5) and (6) of CTA 2010.

F191Section 1102(4) and (5) of CTA 2010.

F190section 1109 of CTA 2010.

F192Regulations under section 283, 284, 285, 295 or 297 of TIOPA 2010.

The references in this Table to regulations under section 602 have effect only for the purpose of giving effect to any provision mentioned in paragraphs (a) and (b) of subsection (2) of that section

F193References in this Table to sections 240, 241, 242 and 243(1) and (2) of ITA 2007 are to provisions that apply only in relation to shares issued after 5 April 2007.

F19498ASpecial penalties in the case of certain returns.

(1)

F195PAYE regulations or regulations under F196section 70(1)(a) or 71 of the Finance Act 2004 (sub-contractors) may provide that this section shall apply in relation to any specified provision of the regulations.

(2)

Where this section applies in relation to a provision of regulations, any person who fails to make a return in accordance with the provision shall be liable—

(a)

to a penalty or penalties of the relevant monthly amount for each month (or part of a month) during which the failure continues, but excluding any month after the twelfth or for which a penalty under this paragraph has already been imposed, and

(b)

if the failure continues beyond twelve months, without prejudice to any penalty under paragraph (a) above, to a penalty not exceeding

F197(i)

in the case of a provision of PAYE regulations, so much of the amount payable by him in accordance with the regulations for the year of assessment to which the return relates as remained unpaid at the end of 19th April after the end of that yearF198, or

(ii)

in the case of a provision of regulations under section 70(1)(a) or 71 of the Finance Act 2004, £3,000.

(3)

For the purposes of subsection (2)(a) above, the relevant monthly amount in the case of a failure to make a return—

(a)

where the number of persons in respect of whom particulars should be included in the return is fifty or less, is £100, and

(b)

where the number is greater than fifty, is £100 for each fifty such persons and an additional £100 where that number is not a multiple of fifty.

F199(4)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20098B European Economic Interest Groupings.

(1)

In this section “grouping” means a European Economic Interest Grouping formed in pursuance of Council Regulation (EEC) No. 2137/85 of 25th July 1985, whether registered in Great Britain, in Northern Ireland or elsewhere.

F201(2)

Subsections (2A) to (4) below apply where a grouping or member of a grouping required by a notice given under section 12A of this Act to deliver a return or other document fails to comply with the notice.

(2A)

The grouping or member shall be liable to a penalty not exceeding £300 multiplied by the number of members of the grouping at the time of the failure to comply.

(2B)

If, on an application made to F202it by an officer of the Board, the F203tribunal so directs, the grouping or member shall be liable, for each day on which the failure continues after the day on which the grouping or member is notified of the direction (but excluding any day for which a penalty under this subsection has already been imposed), to a further penalty or penalties not exceeding £60 multiplied by the number of members of the grouping at the end of that day.

(3)

No penalty shall be imposed under F204subsection (2A) or (2B) above in respect of a failure at any time after the failure has been remedied.

(4)

If a grouping to which, or member to whom, a notice is given proves that there was no income or chargeable gain to be included in the return, the penalty under F205subsections (2A) and (2B) above shall not exceed £100.

(5)

Where a grouping or member fraudulently or negligently delivers an incorrect return, accounts or statement, or makes an incorrect declaration in a return delivered, under section 12A above, the grouping or member shall be liable to a penalty not exceeding £3000 multiplied by the number of members of the grouping at the time of delivery.

F20698CNotification under Part 7 of Finance Act 2004

(1)

A person who fails to comply with any of the provisions of Part 7 of the Finance Act 2004 (disclosure of tax avoidance schemes) mentioned in subsection (2) below shall be liable—

(a)

to a penalty not exceeding

F207(i)

in the case of a provision mentioned in paragraph (a), (b) or (c) of that subsection, £600 for each day during the initial period (but see also subsections (2A), (2B) and (2ZC) below), and

(ii)

in any other case, £5,000, and

(b)

if the failure continues after a penalty is imposed under paragraph (a) above, to a further penalty or penalties not exceeding £600 for each day on which the failure continues after the day on which the penalty under paragraph (a) was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).

(2)

Those provisions are—

(a)

section 308(1) and (3) (duty of promoter in relation to notifiable proposals and notifiable arrangements),

(b)

section 309(1) (duty of person dealing with promoter outside United Kingdom),

(c)

section 310 (duty of parties to notifiable arrangements not involving promoter), F208...

(d)

section F209312(2) (duty of promoter to notify client of reference number)

F210(da)

section 312A(2) (duty of client to notify parties of reference number), F211...

F212(db)

section 313ZA (duty of promoter to provide details of clients),

F213(e)

sections 313A and 313B (duty of promoter to respond to inquiry) F214and

(f)

section 313C (duty of introducer to give details of persons who have provided information).

F215(2ZA)

In this section “the initial period” means the period—

(a)

beginning with the relevant day, and

(b)

ending with the earlier of the day on which the penalty under subsection (1)(a)(i) is determined and the last day before the failure ceases;

and for this purpose “the relevant day” is the day specified in relation to the failure in the following table.

Failure

Relevant day

A failure to comply with subsection (1) or (3) of section 308 in so far as the subsection applies by virtue of an order under section 306A

The first day after the end of the period prescribed under section 306A(6)

A failure to comply with subsection (1) or (3) of section 308 in so far as the subsection applies by virtue of an order under section 308A(2)

The first day after the end of the period prescribed under subsections (5) and (6)(a) of section 308A (as it may have been extended by a direction under subsection (6)(b) of that section)

Any other failure to comply with subsection (1) of section 308

The first day after the end of the period prescribed under that subsection

Any other failure to comply with subsection (3) of section 308

The first day after the end of the period prescribed under that subsection

A failure to comply with subsection (1) of section 309

The first day after the end of the period prescribed under that subsection

A failure to comply with section 310

The first day after the latest time by which section 310 must be complied with in the case concerned

(2ZB)

The amount of a penalty under subsection (1)(a)(i) is to be arrived at after taking account of all relevant considerations, including the desirability of its being set at a level which appears appropriate for deterring the person, or other persons, from similar failures to comply on future occasions having regard (in particular)—

(a)

in the case of a penalty for a person's failure to comply with section 308(1) or (3), to the amount of any fees received, or likely to have been received, by the person in connection with the notifiable proposal (or arrangements implementing the notifiable proposal), or with the notifiable arrangements, and

(b)

in the case of a penalty for a person's failure to comply with section 309(1) or 310, to the amount of any advantage gained, or sought to be gained, by the person in relation to any tax prescribed under section 306(1)(b) in relation to the notifiable arrangements.

(2ZC)

If the maximum penalty under subsection (1)(a)(i) above appears inappropriately low after taking account of those considerations, the penalty is to be of such amount not exceeding £1 million as appears appropriate having regard to those considerations.

(2ZD)

Where it appears to an officer of Revenue and Customs that a penalty under subsection (1)(a)(i) above has been determined on the basis that the initial period begins with a day later than that which the officer considers to be the relevant day, an officer of Revenue and Customs may commence proceedings for a re-determination of the penalty.

(2ZE)

The Treasury may by regulations vary—

(a)

any of the sums for the time being specified in subsection (1) above, and

(b)

the sum specified in subsection (2ZC) above.

F216(2A)

Where a failure to comply with a provision mentioned in subsection (2) concerns a proposal or arrangements in respect of which an order has been made under section 306A of the Finance Act 2004 (doubt as to notifiability), the F217amounts specified in subsection (1)(a)(i) and (b) above shall be increased to the prescribed sum in relation to days falling after the prescribed period.

(2B)

Where a failure to comply with a provision mentioned in subsection (2) concerns a proposal or arrangements in respect of which an order has been made under section 314A of the Finance Act 2004 (order to disclose), the F218amounts specified in subsection (1)(a)(i) and (b) above shall be increased to the prescribed sum in relation to days falling after the prescribed period.

(2C)

In subsection (2A) and (2B)—

(a)

“the prescribed sum” means a sum prescribed by the Treasury by regulations, and

(b)

“the prescribed period” means a period beginning with the date of the order under section F219306A or 314A and prescribed by the Commissioners by regulations.

(2D)

The making of an order under section F220306A or 314A of that Act does not of itself mean that, for the purposes of section 118(2) of this Act, a person either did or did not have a reasonable excuse for non-compliance before the order was made.

(2E)

Where an order is made under section F221306A or 314A of that Act then for the purposes of section 118(2) of this Act—

(a)

the person identified in the order as the promoter of the proposal or arrangements cannot, in respect of any time after the end of the period mentioned in subsection (2B), rely on doubt as to notifiability as an excuse for failure to comply with section 308 of that Act, and

(b)

any delay in compliance with that section after the end of that period is unreasonable unless attributable to something other than doubt as to notifiability.

(2F)

Regulations under F222this section—

(a)

may include incidental or transitional provision,

(b)

shall be made by statutory instrument,

(c)

in the case of regulations under subsection F223(2ZE) or (2C)(a), shall not be made unless a draft has been laid before and approved by resolution of the House of Commons, and

(d)

in the case of regulations under subsection (2C)(b), shall be subject to annulment in pursuance of a resolution of the House of Commons.

(3)

A person who fails to comply with F224subsection (1) of section 313 of the Finance Act 2004 (duties of parties to notifiable arrangements to notify Board of reference number, etc.) F225or regulations under subsection (3) of that section shall be liable to a penalty of the relevant sum.

(4)

In subsection (3) above “the relevant sum” means—

(a)

in relation to a person not falling within paragraph (b) or (c) below, £100 in respect of each scheme to which the failure relates,

(b)

in relation to a person who has previously failed to comply with section F226subsection (1) of section 313 or regulations under subsection (3) of that section on one (and only one) occasion during the period of 36 months ending with the date on which the current failure to comply with that provision began, £500 in respect of each scheme to which the current failure relates (whether or not the same as the scheme to which the previous failure relates), or

(c)

in relation to a person who has previously failed to comply with section F226subsection (1) of section 313 or regulations under subsection (3) of that section on two or more occasions during the period of 36 months ending with the date on which the current failure to comply with that provision began, £1,000 in respect of each scheme to which the current failure relates (whether or not the same as the schemes to which any of the previous failures relates).

(5)

In subsection (4) above “scheme” means any notifiable arrangements within the meaning of Part 7 of the Finance Act 2004.

F22799Assisting in preparation of incorrect return, etc.

Any person who assists in or induces the preparation or delivery of any information, return, accounts or other document which—

(a)

he knows will be, or is or are likely to be, used for any purpose of tax, and

(b)

he knows to be incorrect,

shall be liable to a penalty not exceeding £3,000.

F22899ACertificates of non-liability to income tax.

If a person who gives a certificate of non-liability to income tax in pursuance of regulations under F229section 852 of ITA 2007—

(a)

gives the certificate fraudulently or negligently, or

(b)

fails to comply with any undertaking contained in the certificate in pursuance of the regulations,

he shall be liable to a penalty not exceeding £3,000.

F23099BDeclarations under Chapter 2 of Part 15 of ITA 2007

Where a person fraudulently or negligently gives any incorrect information in a declaration under any of sections 858 to 861 of ITA 2007, the person shall be liable to a penalty not exceeding £3,000.

F231100Determination of penalties by officer of the Board.

(1)

Subject to subsection (2) below and except where proceedings for a penalty have been instituted under section 100D below F232... , an officer of the Board authorised by the Board for the purposes of this section may make a determination imposing a penalty under any provision of the Taxes Acts and setting it at such amount as, in his opinion, is correct or appropriate.

(2)

Subsection (1) above does not apply where the penalty is a penalty under—

F233(a)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)

section 94(1) above as it has effect before the substitution made by section 83 of the Finance (No. 2) Act 1987,

(c)

section 98(1) above as it has effect before the amendments made by section 164 of the Finance Act 1989 or section 98(1)(i) above as it has effect after those amendments, or

(d)

paragraph (a)(i) of section 98A(2) above as it has effect by virtue of section 165(2) of the Finance Act 1989, F234or

(e)

section 98B(2)(a) aboveF235, or

(f)

section 98C(1)(a) above F236...

F236(g)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

Notice of a determination of a penalty under this section shall be served on the person liable to the penalty and shall state the date on which it is issued and the time within such an appeal against the determination may be made.

(4)

After the notice of a determination under this section has been served the determination shall not be altered except in accordance with this section or on appeal.

(5)

If it is discovered by an officer of the Board authorised by the Board for the purposes of this section that the amount of a penalty determined under this section is or has become insufficient the officer may make a determination in a further amount so that the penalty is set at the amount which, in his opinion, is correct or appropriate.

(6)

In any case where—

(a)

a determination under this section is of a penalty under F237... F238... F239paragraph 18(2) of Schedule 18 to the Finance Act 1998 F240... , and

(b)

after the determination has been made it is discovered by an officer of the Board authorised by the Board for the purposes of this section that the amount which was taken into account as the relevant amount of tax is or has become excessive,

the determination shall be revised so that the penalty is set at the amount which is correct; and, where more than the correct amount has already been paid, the appropriate amount shall be repaid.

F231100A Provisions supplementary to section 100.

F241(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)

A penalty determined under section 100 above shall be due and payable at the end of the period of thirty days beginning with the date of the issue of the notice of the determination.

(3)

A penalty determined under section 100 above shall for all purposes be treated as if it were charged in an assessment and due and payable.

F231100B Appeals against penalty determinations.

(1)

An appeal may be brought against the determination of a penalty under section 100 above and, subject to F242... the following provisions of this section, the provisions of this Act relating to appeals shall have effect in relation to an appeal against such a determination as they have effect in relation to an appeal against an assessment to taxF243, except that references to the tribunal shall be taken to be references to the First-tier Tribunal.

(2)

F244On an appeal against the determination of a penalty under section 100 above section 50(6) to (8) of this Act shall not apply but—

(a)

in the case of a penalty which is required to be of a particular amount, the F245First-tier Tribunal may—

(i)

if it appears F246... that no penalty has been incurred, set the determination aside,

(ii)

if the amount determined appears F246... to be correct, confirm the determination, or

(iii)

if the amount determined appears F246... to be incorrect, increase or reduce it to the correct amount.

(b)

in the case of any other penalty, the F245First-tier Tribunal may—

(i)

if it appears F246... that no penalty has been incurred, set the determination aside,

(ii)

if the amount determined appears F246... to be appropriate, confirm the determination,

(iii)

if the amount determined appears F246... to be excessive, reduce it to such other amount (including nil) F247as it considers appropriate, or

(iv)

if the amount determined appears F246... to be insufficient, increase it to such amount not exceeding the permitted maximum F247as it considers appropriate.

F248(3)

In addition to any right of appeal on a point of law under section 11(2) of the TCEA 2007, the person liable to the penalty may appeal to the Upper Tribunal against the amount of the penalty which has been determined under subsection (2), but not against any decision which falls under section 11(5)(d) and (e) of the TCEA 2007 and was made in connection with the determination of the amount of the penalty.

(3A)

Section 11(3) and (4) of the TCEA 2007 applies to the right of appeal under subsection (3) as it applies to the right of appeal under section 11(2) of the TCEA 2007.

(3B)

On an appeal under this section the Upper Tribunal has the same powers as are conferred on the First-tier Tribunal by virtue of this section.

F231100C Penalty proceedings before F249First-tier Tribunal .

(1)

An officer of the Board authorised by the Board for the purposes of this section may commence proceedings before the F250First-tier Tribunal for any penalty to which subsection (1) of section 100 above does not apply by virtue of subsection (2) of that section.

F251(1A)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F252(2)

The person liable to the penalty shall be a party to the proceedings.

(3)

Any penalty determined by the F253First-tier Tribunal in proceedings under this section shall for all purposes be treated as if it were tax charged in an assessment and due and payable.

F254(4)

In addition to any right of appeal on a point of law under section 11(2) of the TCEA 2007, the person liable to the penalty may appeal to the Upper Tribunal against the determination of a penalty in proceedings under subsection (1), but not against any decision which falls under section 11(5)(d) and (e) of the TCEA 2007 and was made in connection with the determination of the amount of the penalty.

(4A)

Section 11(3) and (4) of the TCEA 2007 applies to the right of appeal under subsection (4) as it applies to the right of appeal under section 11(2) of the TCEA 2007.

(5)

On any such appeal the F255Upper Tribunal may—

(a)

if it appears that no penalty has been incurred, set the determination aside,

(b)

if the amount determined appears to be appropriate, confirm the determination,

(c)

if the amount determined appears to be excessive, reduce it to such other amount (including nil) as the F255Upper Tribunal considers appropriate, or

(d)

if the amount determined appears to be insufficient, increase it to such amount not exceeding the permitted maximum as the F255Upper Tribunal considers appropriate.

F231100D Penalty proceedings before court.

(1)

Where in the opinion of the Board the liability of any person for a penalty arises by reason of the fraud of that person or any other person, proceedings for the penalty may be instituted before the High Court or, in Scotland, the Court of Session as the Court of Exchequer in Scotland.

(2)

Proceedings under this section which are not instituted (in England, Wales or Northern Ireland) under the Crown Proceedings Act 1947 by and in the name of the Board as an authorised department for the purposes of that Act shall be instituted—

(a)

in England and Wales, in the name of the Attorney General,

(b)

in Scotland, in the name of the Lord Advocate, and

(c)

in Northern Ireland, in the name of the Attorney General for Northern Ireland.

(3)

Any proceedings under this section instituted in England and Wales shall be deemed to be civil proceedings by the Crown within the meaning of Part II of the Crown Proceedings Act 1947 and any such proceedings instituted in Northern Ireland shall be deemed to be civil proceedings within the meaning of that Part of that Act as for the time being in force in Northern Ireland.

(4)

If in proceedings under this section the court does not find that fraud is proved but consider that the person concerned is nevertheless liable to a penalty, the court may determine a penalty notwithstanding that, but for the opinion of the Board as to fraud, the penalty would not have been a matter for the court.

F256101 Evidence for purposes of proceedings relating to penalties.

An assessment which can no longer be varied by F257the tribunal on an appeal notified to it or by order of any court is sufficient evidence, for the purposes of—

(a)

the preceding provisions of this Part, and

(b)

the provisions of Schedule 18 to the Finance Act 1998 relating to penalties,

that the amounts in respect of which tax is charged in the assessment arose or were received as stated in the assessment.

102 Mitigation of penalties.

The Board may in their discretion mitigate any penalty, or stay or compound any proceedings for F258a penalty, and may also, after judgment, further mitigate or entirely remit the penalty.

F259103Time limits for penalties.

(1)

Subject to subsection (2) below, where the amount of a penalty is to be ascertained by reference to tax payable by a person for any period, the penalty may be determined by an officer of the Board, or proceedings for the penalty may be commenced before the F260tribunal or a Court—

(a)

at any time within six years after the date on which the penalty was incurred, or

(b)

at any later time within three years after the final determination of the amount of tax by reference to which the amount of the penalty is to be ascertained.

F261(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

A penalty under section 99 of this Act may be determined by an officer of the Board, or proceedings for such a penalty may be commenced before a court, at any time within twenty years after the date on which the penalty was incurred.

(4)

A penalty to which neither subsection (1) nor subsection (3) above applies may be so determined, or proceedings for such a penalty may be commenced before the F262tribunal or a court, at any time within six years after the date on which the penalty was incurred or began to be incurred.

F263103ZADisapplication of sections 100 to 103 in the case of certain penalties

Sections 100 to 103 do not apply to a penalty under—

(a)

Schedule 24 to FA 2007 (penalties for errors),

(b)

Schedule 36 to FA 2008 (information and inspection powers),

(c)

Schedule 41 to that Act (penalties for failure to notify and certain other wrongdoing),

(d)

Schedule 55 to FA 2009 (penalties for failure to make returns etc), F264...

(e)

Schedule 56 to that Act (penalties for failure to make payments on time)F265, or

(f)

Schedule 23 to FA 2011 (data-gathering powers).

F266103AInterest on penalties.

A penalty under any of the provisions of F267Part II, IV or VA or this Part of this ActF268, or Schedule 18 to the Finance Act 1998, shall carry interest at the rate applicable under section 178 of the Finance Act 1989 from the date on which it becomes due and payable until payment.

104 Saving for criminal proceedings.

The provisions of the Taxes Acts shall not, save so far as is otherwise provided, affect any criminal proceedings for any misdemeanour.

105F269Admissibility of evidence not affected by offer of settlement etc.

(1)

Statements made or documents produced by or on behalf of a person shall not be inadmissable in any such proceedings as are mentioned in subsection (2) below by reason only that it has been drawn to his attention F270—

(a)

that where serious tax fraud has been committed the Board may accept a money settlement and that the Board will accept such a settlement, and will not pursue a criminal prosecution, if he makes a full confession of all tax irregularities, or

(b)

that the extent to which he is helpful and volunteers information is a factor that will be taken into account in determining the amount of any penalty,

and that he was or may have been induced thereby to make the statements or produce the documents.

(2)

The proceedings mentioned in subsection (1) above are—

(a)

any criminal proceedings against the person in question for any form of F271fraudulent conduct in connection with or in relation to tax, and

(b)

any proceedings against him for the recovery of any F272tax due from him F273and

(c)

any proceedings for a penalty or on appeal against the determination of a penalty.

106 Refusal to allow a deduction of income tax, and avoidance of agreements for payment without deduction.

(1)

A person who refuses to allow a deduction of income tax authorised by the Taxes Acts to be made out of any payment shall incur a penalty of £50.

(2)

Every agreement for payment of interest, rent or other annual payment in full without allowing any such deduction shall be void.

F274Evasion

106AOffence of fraudulent evasion of income tax

(1)

A person commits an offence if that person is knowingly concerned in the fraudulent evasion of income tax by that or any other person.

(2)

A person guilty of an offence under this section is liable—

(a)

on summary conviction, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both, or

(b)

on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine, or both.

(3)

In the application of subsection (2)(a)—

(a)

in England and Wales in relation to offences committed before the commencement of section 282(3) of the Criminal Justice Act 2003, and

(b)

in Northern Ireland,

for “12 months” substitute “ 6 months ”.

(4)

This section does not apply to things done or omitted before 1st January 2001.

Scotland

107 Criminal liability for false statements made to obtain allowances.

(1)

This section applies only in Scotland.

(2)

If any person, for the purpose of obtaining any allowance, reduction, rebate or repayment in respect of tax, either for himself or for any other person, or, in any return made with reference to tax, knowingly makes any false statement or false representation, he shall be liable, on summary conviction, to imprisonment for a term not exceeding six months.

(3)

Notwithstanding anything in the Summary Jurisdiction (Scotland) Act 1954, proceedings for an offence under this section may be commenced at any time within three years from the time when the offence was committed.

(4)

The expression “return” in this section shall be construed without regard to the definition in section 118(1) of this Act .