SCHEDULE 55Penalty for failure to make returns etc
F1Amount of penalty: occasional returns and annual returnsF1Amount of penalty: occasional returns and returns for periods of 6 months or more
F12
Paragraphs 3 to 6 apply in the case of a return falling within any of items F21 to 3, 5 and 7 to 13 in the Table.
F1(1)
Paragraphs 3 to 6 apply in the case of—
(b)
(c)
a return falling within item 7A which relates to a transitional period for the purposes of the annual accounting scheme.
(2)
In sub-paragraph (1)(c), a transitional period for the purposes of the annual accounting scheme is a prescribed accounting period (within the meaning of section 25(1) of VATA 1994) which—
(a)
ends on the day immediately preceding the date indicated by the Commissioners for Her Majesty's Revenue and Customs in a notification of authorisation under regulation 50 of the Value Added Tax Regulations 1995 (S.I. 1995/2518) (admission to annual accounting scheme), or
(b)
begins on the day immediately following the end of the last period of 12 months for which such an authorisation has effect.
3
P is liable to a penalty under this paragraph of £100.
4
(1)
P is liable to a penalty under this paragraph if (and only if)—
(a)
P's failure continues after the end of the period of 3 months beginning with the penalty date,
(b)
HMRC decide that such a penalty should be payable, and
(c)
HMRC give notice to P specifying the date from which the penalty is payable.
(2)
The penalty under this paragraph is £10 for each day that the failure continues during the period of 90 days beginning with the date specified in the notice given under sub-paragraph (1)(c).
(3)
The date specified in the notice under sub-paragraph (1)(c)—
(a)
may be earlier than the date on which the notice is given, but
(b)
may not be earlier than the end of the period mentioned in sub-paragraph (1)(a).
5
(1)
P is liable to a penalty under this paragraph if (and only if) P's failure continues after the end of the period of 6 months beginning with the penalty date.
(2)
The penalty under this paragraph is the greater of—
(a)
5% of any liability to tax which would have been shown in the return in question, and
(b)
£300.
6
(1)
P is liable to a penalty under this paragraph if (and only if) P's failure continues after the end of the period of 12 months beginning with the penalty date.
(2)
Where, by failing to make the return, P F5deliberately withholds information which would enable or assist HMRC to assess P's liability to tax, the penalty under this paragraph is determined in accordance with sub-paragraphs (3) and (4).
(3)
If the withholding of the information is deliberate and concealed, the penalty is the greater of—
(a)
100% of any liability to tax which would have been shown in the return in question, and
(b)
£300.
F6(3A)
For the purposes of sub-paragraph (3)(a), the relevant percentage is—
(a)
for the withholding of category 1 information, F7the relevant percentage,
(b)
for the withholding of category 2 information, 150%, and
(c)
for the withholding of category 3 information, 200%.
(4)
If the withholding of the information is deliberate but not concealed, the penalty is the greater of—
(a)
F8the relevant percentage of any liability to tax which would have been shown in the return in question, and
(b)
£300.
F9(4A)
For the purposes of sub-paragraph (4)(a), the relevant percentage is—
(a)
for the withholding of category 1 information, 70%,
(b)
for the withholding of category 2 information, 105%, and
(c)
for the withholding of category 3 information, 140%.
(5)
In F10any other caseF10any case not falling within sub-paragraph (2), the penalty under this paragraph is the greater of—
(a)
5% of any liability to tax which would have been shown in the return in question, and
(b)
£300.
F11(6)
Paragraph 6A explains the 3 categories of information.
F126A
F13A1
Information is category 0 information if—
(a)
it involves a domestic matter,
(b)
it involves an offshore matter or an offshore transfer, the territory in question is a category 0 territory and it is information which would enable or assist HMRC to assess P's liability to income tax, capital gains tax or inheritance tax, or
(c)
it involves an offshore matter and it is information which would enable or assist HMRC to assess P's liability to a tax other than income tax, capital gains tax or inheritance tax.
(1)
Information is category 1 information if—
(a)
it involves an offshore matter or an offshore transfer,
(b)
the territory in question is a category 1 territory, and
(c)
it is information which would enable or assist HMRC to assess P's liability to income tax, capital gains tax or inheritance tax.
(2)
Information is category 2 information if—
(a)
it involves an offshore matter F14or an offshore transfer,
(b)
the territory in question is a category 2 territory, and
(c)
it is information which would enable or assist HMRC to assess P's liability to income taxF15, capital gains tax or inheritance tax.
(3)
Information is category 3 information if—
(a)
it involves an offshore matter F16or an offshore transfer,
(b)
the territory in question is a category 3 territory, and
(c)
it is information which would enable or assist HMRC to assess P's liability to income taxF17, capital gains tax or inheritance tax.
(4)
Information “involves an offshore matter” if the liability to tax which would have been shown in the return includes a liability to tax charged on or by reference to—
(a)
income arising from a source in a territory outside the UK,
(b)
assets situated or held in a territory outside the UK,
(c)
activities carried on wholly or mainly in a territory outside the UK, or
(d)
anything having effect as if it were income, assets or activities of a kind described above.
F18(4A)
If the liability to tax which would have been shown in the return is a liability to inheritance tax, assets are treated for the purposes of sub-paragraph (4) as situated or held in a territory outside the UK if they are so situated or held immediately after the transfer of value by reason of which inheritance tax becomes chargeable.
(4B)
Information “involves an offshore transfer” if—
(a)
it does not involve an offshore matter,
(b)
it is information which would enable or assist HMRC to assess P's liability to income tax, capital gains tax or inheritance tax,
(c)
by failing to make the return, P deliberately withholds the information (whether or not the withholding of the information is also concealed), and
(d)
the applicable condition in paragraph 6AA is satisfied.
(5)
Information “involves a domestic matter” if F19it does not involve an offshore matter or an offshore transfer.
(6)
If the information which P withholds falls into more than one category—
(a)
P's failure to make the return is to be treated for the purposes of this Schedule as if it were separate failures, one for each category of information according to the matters F20or transfers which the information involves, and
(b)
for each separate failure, the liability to tax which would have been shown in the return in question is taken to be such share of the liability to tax which would have been shown in the return mentioned in paragraph (a) as is just and reasonable.
(7)
For the purposes of this Schedule—
(a)
paragraph 21A of Schedule 24 to FA 2007 (classification of territories) has effect, but
(b)
an order under that paragraph does not apply to a failure if the filing date is before the date on which the order comes into force.
F21(8)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9)
In this paragraph F22and paragraph 6AA—
“assets” has the meaning given in section 21(1) of TCGA 1992, but also includes sterling;
“UK” means the United Kingdom, including the territorial sea of the United Kingdom.
F236AA
(1)
This paragraph makes provision in relation to offshore transfers.
(2)
Where the liability to tax which would have been shown in the return is a liability to income tax, the applicable condition is satisfied if the income on or by reference to which the tax is charged, or any part of the income—
(a)
is received in a territory outside the UK, or
(b)
is transferred before the relevant date to a territory outside the UK.
(3)
Where the liability to tax which would have been shown in the return is a liability to capital gains tax, the applicable condition is satisfied if the proceeds of the disposal on or by reference to which the tax is charged, or any part of the proceeds—
(a)
are received in a territory outside the UK, or
(b)
are transferred before the relevant date to a territory outside the UK.
(4)
Where the liability to tax which would have been shown in the return is a liability to inheritance tax, the applicable condition is satisfied if—
(a)
the disposition that gives rise to the transfer of value by reason of which the tax becomes chargeable involves a transfer of assets, and
(b)
after that disposition but before the relevant date the assets, or any part of the assets, are transferred to a territory outside the UK.
(5)
In the case of a transfer falling within sub-paragraph (2)(b), (3)(b) or (4)(b), references to the income, proceeds or assets transferred are to be read as including references to any assets derived from or representing the income, proceeds or assets.
(6)
In relation to an offshore transfer, the territory in question for the purposes of paragraph 6A is the highest category of territory by virtue of which the information involves an offshore transfer.
(7)
“Relevant date” means the date on which P becomes liable to a penalty under paragraph 6.
6AB
Regulations under paragraph 21B of Schedule 24 to FA 2007 (location of assets etc) apply for the purposes of paragraphs 6A and 6AA of this Schedule as they apply for the purposes of paragraphs 4A and 4AA of that Schedule.