The legislation creates a wide-ranging and complex penalty regime to encourage compliance. The main penalties are set out in this section. The defence of reasonable excuse can be used to mitigate some but not all these penalties.
Penalty for underdeclared levy or a failure to notify an under-assessment for periods with a due date from 1 April 2010
Where the levy is underdeclared or tax credits are over-claimed, a behavioural penalty may be applied. The level of penalty will depend upon whether the error is:
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•ÌýÌýÌýÌý Made even though reasonable care was taken
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No penalty will apply where HMRC considers that reasonable care was taken to ensure accuracy.
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•ÌýÌýÌýÌý Careless
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Where HMRC considers the error to have been careless, the level of penalty will depend upon whether its disclosure to HMRC was prompted or unprompted. An unprompted disclosure carries a penalty of between 0% and 30% of the tax due. A prompted disclosure carries a penalty of between 15% and
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Web page updated on 18 Mar 2025 04:36