Part 3U.K.Procedure
AssessmentU.K.
13(1)[F1Where a person] becomes liable for a penalty under paragraph 1[F2, 1A] or 2 HMRC shall—U.K.
(a)assess the penalty,
(b)[F3notify the person], and
(c)state in the notice a tax period in respect of which the penalty is assessed.
[F4(1A)A penalty under paragraph 1, 1A or 2 must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued.]
(2)An assessment—
(a)shall be treated for procedural purposes in the same way as an assessment to tax (except in respect of a matter expressly provided for by this Act),
(b)may be enforced as if it were an assessment to tax, and
(c)may be combined with an assessment to tax.
(3)An assessment of a penalty under paragraph 1 [F5 or 1A] must be made [F6before the end of the] period of 12 months beginning with—
(a)the end of the appeal period for the decision correcting the inaccuracy, or
(b)if there is no assessment [F7to the tax concerned] within paragraph (a), the date on which the inaccuracy is corrected.
(4)An assessment of a penalty under paragraph 2 must be made [F8before the end of the period of 12 months beginning with—
(a)the end of the appeal period for the assessment of tax which corrected the understatement, or
(b)if there is no assessment within paragraph (a), the date on which the understatement is corrected.]
(5)For the purpose of sub-paragraphs (3) and (4) a reference to an appeal period is a reference to the period during which—
(a)an appeal could be brought, or
(b)an appeal that has been brought has not been determined or withdrawn.
(6)Subject to sub-paragraphs (3) and (4), a supplementary assessment may be made in respect of a penalty if an earlier assessment operated by reference to an underestimate of potential lost revenue.
[F9(7)In this Part of this Schedule references to an assessment to tax, in relation to inheritance tax and stamp duty reserve tax, are to a determination.]
Textual Amendments
F1Words in Sch. 24 para. 13(1) substituted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 12(2)(a); S.I. 2009/571, art. 2
F2Word in Sch. 24 para. 13(1) inserted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 12(2)(b); S.I. 2009/571, art. 2
F3Words in Sch. 24 para. 13(1) substituted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 12(2)(c); S.I. 2009/571, art. 2
F4Sch. 24 para. 13(1A) inserted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 12(3); S.I. 2009/571, art. 2
F5Words in Sch. 24 para. 13(3) inserted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 12(4)(a); S.I. 2009/571, art. 2
F6Words in Sch. 24 para. 13(3) substituted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 12(4)(b); S.I. 2009/571, art. 2
F7Words in Sch. 24 para. 13(3) inserted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 12(4)(c); S.I. 2009/571, art. 2
F8Words in Sch. 24 para. 13(4) substituted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 12(5); S.I. 2009/571, art. 2
F9Sch. 24 para. 13(7) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 57 para. 5
Commencement Information
I1Sch. 24 para. 13 in force at 1.4.2008 for certain purposes, 1.7.2008 for certain purposes, 1.1.2009 for certain purposes, and 1.4.2009 in so far as not already in force by S.I. 2008/568, art. 2 (with art. 3)
SuspensionU.K.
14(1)HMRC may suspend all or part of a penalty for a careless inaccuracy under paragraph 1 by notice in writing to P.U.K.
(2)A notice must specify—
(a)what part of the penalty is to be suspended,
(b)a period of suspension not exceeding two years, and
(c)conditions of suspension to be complied with by P.
(3)HMRC may suspend all or part of a penalty only if compliance with a condition of suspension would help P to avoid becoming liable to further penalties under paragraph 1 for careless inaccuracy.
(4)A condition of suspension may specify—
(a)action to be taken, and
(b)a period within which it must be taken.
(5)On the expiry of the period of suspension—
(a)if P satisfies HMRC that the conditions of suspension have been complied with, the suspended penalty or part is cancelled, and
(b)otherwise, the suspended penalty or part becomes payable.
(6)If, during the period of suspension of all or part of a penalty under paragraph 1, P becomes liable for another penalty under that paragraph, the suspended penalty or part becomes payable.
Commencement Information
I2Sch. 24 para. 14 in force at 1.4.2008 for certain purposes, 1.7.2008 for certain purposes, 1.1.2009 for certain purposes, and 1.4.2009 in so far as not already in force by S.I. 2008/568, art. 2 (with art. 3)
AppealU.K.
15(1)[F10A person may] appeal against a decision of HMRC that a penalty is payable [F11by the person].U.K.
(2)[F10A person may] appeal against a decision of HMRC as to the amount of a penalty payable [F11by the person].
(3)[F10A person may] appeal against a decision of HMRC not to suspend a penalty payable [F11by the person].
(4)[F10A person may] appeal against a decision of HMRC setting conditions of suspension of a penalty payable [F11by the person].
Textual Amendments
F10Words in Sch. 24 para. 15 substituted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 13(a); S.I. 2009/571, art. 2
F11Words in Sch. 24 para. 15 substituted (1.4.2009) by Finance Act 2008 (c. 9), s. 122(2), Sch. 40 para. 13(b); S.I. 2009/571, art. 2
Commencement Information
I3Sch. 24 para. 15 in force at 1.4.2008 for certain purposes, 1.7.2008 for certain purposes, 1.1.2009 for certain purposes, and 1.4.2009 in so far as not already in force by S.I. 2008/568, art. 2 (with art. 3)
[F1216(1)An appeal under this Part of this Schedule shall be treated in the same way as an appeal against an assessment to the tax concerned (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal).U.K.
(2)[F13Sub-paragraph (1) does not apply—
(a)so as to require P to pay a penalty before an appeal against the assessment of the penalty is determined, or
(b)in respect of any other matter expressly provided for by this Act.]]
Textual Amendments
F12Sch. 24 para. 16 substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 466
F13Sch. 24 para. 16(2) substituted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 57 para. 6
17(1)On an appeal under paragraph 15(1) the F14... tribunal may affirm or cancel HMRC's decision.U.K.
(2)On an appeal under paragraph 15(2) the F15... tribunal may—
(a)affirm HMRC's decision, or
(b)substitute for HMRC's decision another decision that HMRC had power to make.
(3)If the F16... tribunal substitutes its decision for HMRC's, the F16... tribunal may rely on paragraph 11—
(a)to the same extent as HMRC (which may mean applying the same percentage reduction as HMRC to a different starting point), or
(b)to a different extent, but only if the F16... tribunal thinks that HMRC's decision in respect of the application of paragraph 11 was flawed.
(4)On an appeal under paragraph 15(3)—
(a)the F17... tribunal may order HMRC to suspend the penalty only if it thinks that HMRC's decision not to suspend was flawed, and
(b)if the F18... tribunal orders HMRC to suspend the penalty—
(i)P may appeal F19... against a provision of the notice of suspension, and
(ii)the F20... tribunal may order HMRC to amend the notice.
(5)On an appeal under paragraph 15(4) the F21... tribunal—
(a)may affirm the conditions of suspension, or
(b)may vary the conditions of suspension, but only if the F21... tribunal thinks that HMRC's decision in respect of the conditions was flawed.
[F22(5A)In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of paragraph 16(1)).]
(6)In sub-paragraphs (3)(b), (4)(a) and (5)(b) “flawed” means flawed when considered in the light of the principles applicable in proceedings for judicial review.
(7)Paragraph 14 (see in particular paragraph 14(3)) is subject to the possibility of an order under this paragraph.
Textual Amendments
F14Word in Sch. 24 para. 17(1) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(2)
F15Word in Sch. 24 para. 17(2) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(2)
F16Word in Sch. 24 para. 17(3) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(2)
F17Word in Sch. 24 para. 17(4)(a) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(3)(a)
F18Word in Sch. 24 para. 17(4)(b) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(3)(b)(i)
F19Words in Sch. 24 para. 17(4)(b)(i) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(3)(b)(ii)
F20Word in Sch. 24 para. 17(4)(b)(ii) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(3)(b)(iii)
F21Word in Sch. 24 para. 17(5) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(4)
F22Sch. 24 para. 17(5A) inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 467(5)
Commencement Information
I4Sch. 24 para. 17 in force at 1.4.2008 for certain purposes, 1.7.2008 for certain purposes, 1.1.2009 for certain purposes, and 1.4.2009 in so far as not already in force by S.I. 2008/568, art. 2 (with art. 3)