Child Trust Funds Act 2004

Penalties

20 Penalties

(1) A penalty of £300 may be imposed on any person who fraudulently—

(a) applies to open a child trust fund,

(b) makes a withdrawal from a child trust fund otherwise than as permitted by regulations under section 3(4)(d), or

(c) secures the opening of a child trust fund by the Inland Revenue.

(2) A penalty not exceeding £3,000 may be imposed on—

(a) an account provider who fraudulently or negligently makes an incorrect statement or declaration in connection with a claim under section 8 or 9 or regulations under section 10 or 13, and

(b) any person who fraudulently or negligently provides incorrect information in response to a requirement imposed by or under regulations under section 15.

(3) Penalties may be imposed on—

(a) an account provider who fails to make a claim under section 8 or 9 or regulations under section 10 by the time required by regulations under the section concerned, and

(b) any person who fails to make a document available, or provide information, in accordance with regulations under section 15.

(4) The penalties which may be imposed under subsection (3) are—

(a) a penalty not exceeding £300, and

(b) if the failure continues after a penalty under paragraph (a) is imposed, a further penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which the penalty under that paragraph was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).

(5) No penalty under subsection (3) may be imposed on a person in respect of a failure after the failure has been remedied.

(6) For the purposes of subsection (3) a person is to be taken not to have failed to make a claim, make available a document or provide information which must be made, made available or provided by a particular time—

(a) if the person made it, made it available or provided it within such further time (if any) as the Inland Revenue may have allowed,

(b) if the person had a reasonable excuse for not making it, making it available or providing it by that time, or

(c) if, after having had such an excuse, the person made it, made it available or provided it without unreasonable delay.

(7) A penalty may be imposed on an account provider in respect of—

(a) the provision by the account provider, as a child trust fund, of an account which does not meet the condition in subsection (8),

(b) a failure by the account provider to comply with section 8(2) or 9(3) or with a requirement imposed on the account provider by regulations under section 5(5), 6(3), 7 or 10(3), or

(c) a breach of section 12(1), or regulations under section 12(2), in relation to a child trust fund held with the account provider.

(8) An account meets the condition referred to in subsection (7)(a) if—

(a) it is of one of the descriptions prescribed by regulations under section 3(2),

(b) section 3(4) is complied with in relation to it, and

(c) the requirements imposed by regulations under section 3(5) are satisfied in relation to it.

(9) The penalty which may be imposed under subsection (7) on the account provider is a penalty not exceeding—

(a) £300, or

(b) £1 in respect of each account affected by the matter, or any of the matters, in respect of which the penalty is imposed,

whichever is greater.

21 Decisions, appeals, mitigation and recovery

(1) It is for the Inland Revenue to impose a penalty under section 20.

(2) If the Inland Revenue decide to impose such a penalty the decision must (subject to the permitted maximum) set it at such amount as, in their opinion, is appropriate.

(3) A decision to impose such a penalty may not be made after the end of the period of six years beginning with the date on which the penalty was incurred or began to be incurred.

(4) The Inland Revenue must give notice of such a decision to the person on whom the penalty is imposed.

(5) The notice must state the date on which it is given and give details of the right to appeal against the decision under section 22.

(6) After the notice has been given, the decision must not be altered except on appeal.

(7) But the Inland Revenue may, in their discretion, mitigate any penalty under section 20.

(8) A penalty under section 20 becomes payable at the end of the period of 30 days beginning with the date on which notice of the decision is given.

(9) On an appeal under section 22 against a decision under this section, the General Commissioners or Special Commissioners may—

(a) if it appears that no penalty has been incurred, set the decision aside,

(b) if the amount set appears to be appropriate, confirm the decision,

(c) if the amount set appears to be excessive, reduce it to such other amount (including nil) as they consider appropriate, or

(d) if the amount set appears to be insufficient, increase it to such amount not exceeding the permitted maximum as they consider appropriate.

(10) An appeal from a decision of the Commissioners under subsection (9) lies, at the instance of the person on whom the penalty was imposed, to—

(a) the High Court, or

(b) in Scotland, the Court of Session as the Court of Exchequer in Scotland,

and on such an appeal the court has a similar jurisdiction to that conferred on the Commissioners by that subsection.

(11) A penalty is to be treated for the purposes of Part 6 of the Taxes Management Act 1970 (c. 9) (collection and recovery) as if it were tax charged in an assessment and due and payable.