SolvedCH155180 | Penalties for Failure to Pay on Time: Rules for specific taxes: Income Tax and Capital Gains Tax (IT & CGT): Penalties: Example
From HM Revenue & Customs · Compliance Handbook
Example of initial and further penalties on an amount of income tax and capital gains tax
Martin delivers his 2011/12 ITSA return showing a balancing payment of £21,000 due on 31 January 2013. But he fails to make any payment. Martin makes some payments at later dates, as shown in the table below.
The due date is 31 January 2013. Because a payment has not been made on or before 2 March 2013 then a penalty is due. The penalties are as follows.
| Payment | Unpaid Tax | Penalty | |
|---|---|---|---|
| Amount due at 31 January 2013 | £21,000 | ||
| Initial penalty of 5% on £21,000 at 3 March 2013 | £1,050 | ||
| Payment 2 May 2013 | £5,000 | £16,000 | |
| 5 month further penalty of 5% on £16,000 at 3 August 2013 | £800 | ||
| Payment 20 September 2013 | £10,000 | £6,000 | |
| 11 month further penalty of 5% on £6,000 at 3 February 2014 | £300 | ||
| Payment 20 February 2014 | £6,000 | £0 | |
| Total penalty | £2,150 |