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EM4706 | Penalties: Failure to Comply with SA Information Notices: Daily Penalties: £30 or Less

From HM Revenue & Customs · Enquiry Manual

This guidance only applies to information notices issued on or before 31 March 2009.

After 31 March 2009 you cannot issue notices under TMA70/S20, TMA70/S19A, FA98/SCH18/PARA27 or TMA70/SCH1A/PARA6. You must instead use the information powers in FA08/SCH36, see CH20000+

TMA70/S97AA(2)

FA98/SCH18/PARA 29(2)

Except in exceptional circumstances (see EM4710) daily penalties are imposed by HMRC via TMA70/S100. The ‘relevant amount’ is a sum not exceeding £30.

The authorised officer, see EM5320+ and EM4702, for

  • the first determination of daily penalties is any Grade 7 except where that Grade 7 is the caseworker themselves

  • subsequent determinations of daily penalties must be authorised by any Grade 6 except where that Grade 6 is the caseworker themselves.

There should be clear evidence on your papers that the authorised officer approved the amount of the daily penalty before the penalty notice was issued. These daily penalties should normally be imposed approximately 30 days after the date the initial £50 penalty was imposed. If you delay taking action then even a £10 daily penalty will have grown to a substantial figure. In determining the amount of these penalties, you will need to consider all the relevant factors, such as

  • the amount of tax that appears to be at stake

  • the nature and extent of the records requested

  • the problems facing the taxpayer in getting together all the information requested

  • the degree of co-operation afforded to date in the enquiry

  • the taxpayer’s general history of compliance/co-operation

  • the need to obtain early compliance with your information notice.

Whatever figure you decide upon, you may need to justify it on appeal before the tribunal.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

The penalties should again be imposed using LFC form SA521 or SA580.

You should select the appropriate continuing penalty and enter the amount of the penalty, the amount per day, the start/end dates and the number of days.

The period to be counted

  • starts with the day after the date on which the initial £50 penalty was imposed (or the day after the last day to which previous penalties ran, if further daily penalties have been approved)

  • ends not later than the last working day before that on which the determination will be made

both dates inclusive.

You should issue the SA521/SA580 with a covering letter to the taxpayer

  • referring to your previous correspondence

  • saying that you are enclosing a formal notice imposing a penalty

  • enclosing a payslip (in CT cases this will need to be produced by the SAFE Nominee locally by pasting and copying the charge reference number from SAFE into the ‘Print Payslip’ application).

Issue a copy of your letter to the agent if there is one and keep a copy of the letter and SA521/SA580 in your papers.

Notifying the Penalty for Recovery

For SA cases

  • Include the penalty on the taxpayer’s statement of account using ‘Create Sundry Charge’. In the charge due date field enter the due and payable date for the penalty. This will be 30 days from the date of issue of the penalty notice in accordance with Section 100A(2) TMA.

For CTSA cases

  • Although the penalty charge will be raised in LFC it will be collected via SAFE under the charge type ‘394 CT Penalty’. The SAFE Nominee must raise the penalty charge on SAFE based on the details shown on the SA580.