CH404575 | Charging penalties: interaction between penalties: details and examples: a failure to notify penalty is payable and a penalty under FA1994/S9 was incurred

Para15(2), Sch41, FA08 requires that a failure to notify penalty must be reduced by a penalty incurred under Section 9 of the Finance Act 1994, see Excise Civil Penalties, for a failure to comply with a relevant obligation. A relevant obligation is a requirement to notify to be approved, registered or licensed within an excise regime.

If a s9, FA94 penalty has been assessed, the Sch41, FA08 penalty must be reduced.

If a s9, FA94 penalty has not already been assessed, you should charge the Schedule 41 penalty only.

Guidance on making adjustments to penalties in NPPS is at CH407720.

Example

Barry is discovered operating an illegal betting business from an industrial unit. A duty assessment of £10,000 is raised and also a £250 penalty is assessed under s9, FA94.

You subsequently establish that Barry is liable to a 50% penalty under Sch41, FA08 for his deliberate failure to notify his liability to register for betting duty.

You assess the Sch41, FA08 penalty in the amount of £5,000 less the £250 s9, FA94 penalty.

If a s9, FA94 penalty has not already been assessed, you will raise the Sch41 penalty assessment only, in the amount of £5,000.