CH177320 | Sanctionable conduct by tax advisers: file access notice: penalties for failing to comply: daily penalties - example

We issued a file access notice to Howard, a tax adviser, on 3 October 2029. The notice requested the working papers for a selection of his clients going back three years, when he commenced business.

The file access notice requested Howard to provide the documents by 3 November 2029.

Howard did not provide all the required documents by 3 November 2029, so we charged him an initial penalty of £300 on 15 November 2029.

If Howard still fails to comply with the file access notice, we will consider charging daily penalties. Although we would allow a period of grace to see whether the initial penalty prompts compliance, we can charge daily penalties from 16 November 2029, being the day after the initial penalty.

We can charge daily penalties of up to £60 for that and each subsequent day that he fails to comply with the file access notice.

If Howard continues to fail to comply with the file access notice for more than 30 days from the date that we issued with him with his first daily penalty, then we may make an application to the tribunal to increase the daily penalty amount (up to £1,000). So, if we issued Howard with his first £60 daily penalty on 1 December 2029, then we may make an application to the tribunal to increase the daily penalty amount from 31 December 2029 onwards (provided Howard has not complied with the file access notice in the meantime).

Before we make an application to the tribunal for an increased daily penalty amount, we must have told Howard that we may do this. However, we do not need to wait until 31 December 2029 to tell him this; it will be enough to warn him when we issue his first £60 daily penalty that, if he continues to fail to comply for more than 30 days, we may make an application to the tribunal.

FA12/SCH38/PARA23