Finance Act 2007

Part 4 Miscellaneous

Agency

18 (1) P is liable under paragraph 1(1)(a) where a document which contains a careless inaccuracy (within the meaning of paragraph 3) is given to HMRC on P’s behalf.

(2) In paragraph 2(1)(b) and (2)(a) a reference to P includes a reference to a person who acts on P’s behalf in relation to tax.

(3) Despite sub-paragraphs (1) and (2), P is not liable to a penalty in respect of anything done or omitted by P’s agent where P satisfies HMRC that P took reasonable care to avoid inaccuracy (in relation to paragraph 1) or unreasonable failure (in relation to paragraph 2).

(4) In paragraph 3(1)(a) (whether in its application to a document given by P or, by virtue of sub-paragraph (1) above, in its application to a document given on P’s behalf) a reference to P includes a reference to a person who acts on P’s behalf in relation to tax.

(5) In paragraph 3(2) a reference to P includes a reference to a person who acts on P’s behalf in relation to tax.

Companies: officers' liability

19 (1) Where a penalty under paragraph 1 is payable by a company for a deliberate inaccuracy which was attributable to an officer of the company—

(a) the officer as well as the company shall be liable to pay the penalty, and

(b) HMRC may pursue the officer for such portion of the penalty (which may be 100%) as they may specify by written notice to the officer.

(2) Sub-paragraph (1) does not allow HMRC to recover more than 100% of a penalty.

(3) In the application of sub-paragraph (1) to a body corporate “officer” means—

(a) a director (including a shadow director within the meaning of section 251 of the Companies Act 2006 (c. 46)), or

(b) a secretary.

(4) In the application of sub-paragraph (1) in any other case “officer” means—

(a) a director,

(b) a manager,

(c) a secretary, and

(d) any other person managing or purporting to manage any of the company’s affairs.

(5) A reference to P in this Schedule (including paragraph 15) includes a reference to an officer of the company who is liable for a portion of the penalty in accordance with this paragraph.

Partnerships

20 (1) This paragraph applies where P is liable to a penalty under paragraph 1 for an inaccuracy in or in connection with a partnership return.

(2) Where the inaccuracy affects the amount of tax due or payable by a partner of P, the partner is also liable to a penalty (“a partner’s penalty”).

(3) Paragraphs 4 to 13 and 19 shall apply in relation to a partner’s penalty (for which purpose a reference to P shall be taken as a reference to the partner).

(4) Potential lost revenue shall be calculated separately for the purpose of P’s penalty and any partner’s penalty, by reference to the proportions of any tax liability that would be borne by each partner.

(5) Paragraph 14 shall apply jointly to P’s penalty and any partner’s penalties.

(6) P may bring an appeal under paragraph 15 in respect of a partner’s penalty (in addition to any appeal that P may bring in connection with the penalty for which P is liable).

Double jeopardy

21 P is not liable to a penalty under paragraph 1 or 2 in respect of an inaccuracy or failure in respect of which P has been convicted of an offence.