CH 7 - CTSA Penalty Regime Flashcards
When penalty is charged for failure to notify HMRC chargeability to corporation tax?
and how it’s calcculated
The penalty for failure to notify HMRC is charged as a percentage of the amount of CT which is unpaid 12 months after the end of the accounting period as a result of the failure to notify.
What is maximum and minimum penalty for failure to notify HMRC?
D&C - Max 100% | UD 30% | PD 50%
D&UC - Max 70% | UD 20% | PD 35%
Any Other - Max 30% | UD <12m NIL & > 12m 10% | PD <12m 10% >12m 20%
Is due to be paid wihin 30 days of the assessment being raised.
What is the penalty for late CT return
due over 12mts after the period of account;
Flat rate penalty :
- £100 immediately &
- doubles to £200 if more than 3mts late
- up to £500 (or £1,000 if filed 3 mts late) for a company’s hird consecutive offence
Tax geared penalty not filed 18mts after AP (in addition to flat rate penalty)
- not filed within 18mts - 10% of CT unpaid at the 18m point
- not filed within 2 years - 20% of CT if unpaid at the 18m point
The penalty for late filling is charged in addition to the penalty for late payment if both penalties apply.
What is the penalty for failure to keep records for 6 years?
£3,000 per accounting period
What is penalty for failure to provide documents for the purpose of an enquiry?
£300,
but if failure continues, further penalties of up to £60 per day may be imposed
What are the penalties for incorrect returns?
When inaccuracy is assumed to be careless?
if it arises as a result of the company entering into an ineffective avoidance arrangement,
unless it was actually deliberate
or
the company can show that it took reasonable care to avoid inaccuracy
When incorrect returns penaly can be levied on 3rd parties?
if they deliberately provide false information
When penalties can be avoided?
When ;
- there is a reasonable excuse
- can be reduced if special circumstances apply
What penalties are due on large companies that deliberately or recklessly fails to pay right amount on an instalment date?
will pay a penalty of up to twice the amount of interest chargeable on late paid instalment payments
The penalty can be avoided if there is a reasonable excuse, or it can be reduced if special circumstances apply.
When HMRC may publish information about a person who has incurred relevant tax penalties in consequence of an HMRC investigation?
where the potential lost revenue exceeds £25,000.
HMRC may publish information about any person who has incurred relevant tax penalties in consequence of an HMRC investigation
What can happen to a company using a tax avoidance shceme which is subsequently defeated?
HMRC will issue a warning notice that the use of any further defeated schemes within the next five years will result in a penalty being issued, of up to 60% of the amount of tax understated or overclaimed for the third defeated scheme used in the warning period.
When HMRC can publish details about ‘Serial tax avoiders’?
When HMRC issues 3 warning notices to a serial tax avoiders
and are not permitted to make any claim for a relief for a 3-year restriction period
What are penalties for enablers of defeated tax avoidance?
penalty for enablers equal to the total amount of relevant consideration which they received or were due to receive in respect of the arrangement.
This applies on or after 16/11/2017 for companies who enter into abusive tax arrangements and the arrangements are subsequently defeated.
