SCHEDULES
C1C5C3C2C4C6C7C8C9C10C13C12C11C14C15SCHEDULE 24Penalties for errors
Sch. 24 applied (6.4.2008) by The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004), reg. 81(1)(1A), Sch. 4 paras. 21A(8), 21D(9), 21F(12), 22(7), 31(8) (as amended by S.I. 2008/636, reg. 7; S.I. 2010/721, reg. 4; S.I. 2012/821, reg. 11)
Sch. 24 applied (E.W.) (6.4.2009) by The Education (Student Loans) (Repayment) Regulations 2009 (S.I. 2009/470), regs. 1(1), 13(3)(b), 40(4), 59(8)(b) (with reg. 1(4)(6))
Sch. 24 applied (N.I.) (6.4.2009) by The Education (Student Loans) (Repayment) Regulations (Northern Ireland) 2009 (S.R. 2009/128), regs. 1(1), 9(3)(b), 35(4), 54(8)(b)
Sch. 24 modified (8.4.2010) by Finance Act 2010 (c. 13), Sch. 1 para. 37
Sch. 24 applied (with modifications) (19.4.2013) by The Small Charitable Donations Regulations 2013 (S.I. 2013/938), regs. 1, 15
Sch. 24 excluded (17.7.2014) by Finance Act 2014 (c. 26), Sch. 35 para. 13(a)
Sch. 24 applied by 1993 c. 34, Sch. 20A para. 9A(6) (as inserted (19.12.2014) by The Lloyd's Underwriters (Conversion of Partnerships to Underwriting through Successor Companies) (Tax) Regulations 2014 (S.I. 2014/3133), regs. 1, 5(4))
Sch. 24 applied (with modifications) by 1992 c. 4, s. 11A(1)(3) (as inserted (with effect in accordance with Sch. 1 para. 35 of the amending Act) by National Insurance Contributions Act 2015 (c. 5), Sch. 1 para. 3)
Sch. 24 applied (with modifications) by 1992 c.7 (N.I.) s. 11A(1)(3) (as inserted (with effect in accordance with Sch. 1 para. 35 of the amending Act) by National Insurance Contributions Act 2015 (c. 5), Sch. 1 para. 12)
Sch. 24 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 85(4)
Sch. 24 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 50(3)
Sch. 24 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 24(3)
Sch. 24 applied (with modifications) (1.5.2023) by The Value Added Tax (Margin Schemes and Removal or Export of Goods: VAT-related Payments) Order 2023 (S.I. 2023/68), arts. 1(1), 14 (with art. 1(2))
Sch. 24 applied (14.9.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023 (S.I. 2023/912), regs. 1(2), 40(2) (with reg. 1(3))
C7Part 2Amount of penalty
Standard amount
F14
1
This paragraph sets out the penalty payable under paragraph 1.
2
If the inaccuracy is in category 1, the penalty is—
a
for careless action, 30% of the potential lost revenue,
b
for deliberate but not concealed action, 70% of the potential lost revenue, and
c
for deliberate and concealed action, 100% of the potential lost revenue.
3
If the inaccuracy is in category 2, the penalty is—
a
for careless action, 45% of the potential lost revenue,
b
for deliberate but not concealed action, 105% of the potential lost revenue, and
c
for deliberate and concealed action, 150% of the potential lost revenue.
4
If the inaccuracy is in category 3, the penalty is—
a
for careless action, 60% of the potential lost revenue,
b
for deliberate but not concealed action, 140% of the potential lost revenue, and
c
for deliberate and concealed action, 200% of the potential lost revenue.
5
Paragraph 4A explains the 3 categories of inaccuracy.
4A
1
An inaccuracy is in category 1 if—
a
it involves a domestic matter, or
b
it involves an offshore matter and—
i
the territory in question is a category 1 territory, or
ii
the tax at stake is a tax other than income tax or capital gains tax.
2
An inaccuracy is in category 2 if—
a
it involves an offshore matter F4or an offshore transfer ,
b
the territory in question is a category 2 territory, and
c
the tax at stake is income tax F5, capital gains tax or inheritance tax .
3
An inaccuracy is in category 3 if—
a
it involves an offshore matter F6or an offshore transfer ,
b
the territory in question is a category 3 territory, and
c
the tax at stake is income tax F7 , capital gains tax or inheritance tax .
4
An inaccuracy “involves an offshore matter” if it results in a potential loss of revenue that is charged on or by reference to—
a
income arising from a source in a territory outside the UK,
b
assets situated or held in a territory outside the UK,
c
activities carried on wholly or mainly in a territory outside the UK, or
d
anything having effect as if it were income, assets or activities of a kind described above.
F34A
Where the tax at stake is inheritance tax, assets are treated for the purposes of sub-paragraph (4) as situated or held in a territory outside the UK if they are so situated or held immediately after the transfer of value by reason of which inheritance tax becomes chargeable.
4B
An inaccuracy “involves an offshore transfer” if—
a
it does not involve an offshore matter,
b
it is deliberate (whether or not concealed) and results in a potential loss of revenue,
c
the tax at stake is income tax, capital gains tax or inheritance tax, and
d
the applicable condition in paragraph 4AA is satisfied.
5
An inaccuracy “involves a domestic matter” if it results in a potential loss of revenue F8and does not involve either an offshore matter or an offshore transfer .
6
If a single inaccuracy is in more than one category (each referred to as a “relevant category”)—
a
it is to be treated for the purposes of this Schedule as if it were separate inaccuracies, one in each relevant category according to the matters F9or transfers that it involves, and
b
the potential lost revenue is to be calculated separately in respect of each separate inaccuracy.
7
“Category 1 territory”, “category 2 territory” and “category 3 territory” are defined in paragraph 21A.
8
“Assets” has the meaning given in section 21(1) of TCGA 1992, but also includes sterling.
F24AA
1
This paragraph makes provision in relation to offshore transfers.
2
Where the tax at stake is income tax, the applicable condition is satisfied if the income on or by reference to which the tax is charged, or any part of the income—
a
is received in a territory outside the UK, or
b
is transferred before the filing date to a territory outside the UK.
3
Where the tax at stake is capital gains tax, the applicable condition is satisfied if the proceeds of the disposal on or by reference to which the tax is charged, or any part of the proceeds—
a
are received in a territory outside the UK, or
b
are transferred before the filing date to a territory outside the UK.
4
Where the tax at stake is inheritance tax, the applicable condition is satisfied if—
a
the disposition that gives rise to the transfer of value by reason of which the tax becomes chargeable involves a transfer of assets, and
b
after that disposition but before the filing date the assets, or any part of the assets, are transferred to a territory outside the UK.
5
In the case of a transfer falling within sub-paragraph (2)(b), (3)(b) or (4)(b), references to the income, proceeds or assets transferred are to be read as including references to any assets derived from or representing the income, proceeds or assets.
6
In relation to an offshore transfer, the territory in question for the purposes of paragraph 4A is the highest category of territory by virtue of which the inaccuracy involves an offshore transfer.
7
“Filing date” means the date when the document containing the inaccuracy is given to HMRC.
8
“Assets” has the same meaning as in paragraph 4A.
4B
The penalty payable under paragraph 1A is 100% of the potential lost revenue.
4C
The penalty payable under paragraph 2 is 30% of the potential lost revenue.
4D
Paragraphs 5 to 8 define “potential lost revenue”.
Sch. 24 applied (N.I.) (1.4.2008) by The Education (Student Loans) (Repayment) Regulations (Northern Ireland) 2000 (S.R. 2000/121), regs. 7(2A)(b), 26(4) (as amended by S.R. 2008/129, regs. 1, 3(a), 4)