SCHEDULES

SCHEDULE 11U.K.Penalty for failure to make payments on time

6U.K.For paragraph 6 substitute—

“6(1)P is liable to a penalty, in relation to each tax, of an amount determined by reference to—

(a)the number of defaults that P has made during the tax year (see sub-paragraphs (2) and (3)), and

(b)the amount of that tax comprised in the total of those defaults (see sub-paragraphs (4) to (7)).

(2)For the purposes of this paragraph, P makes a default when P fails to make one of the following payments (or to pay an amount comprising two or more of those payments) in full on or before the date on which it becomes due and payable—

(a)a payment under PAYE regulations;

(b)a payment of earnings-related contributions within the meaning of the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004);

(c)a payment due under the Income Tax (Construction Industry Scheme) Regulations 2005 (S.I. 2005/2045);

(d)a repayment in respect of a student loan due under the Education (Student Loans) (Repayments) Regulations 2009 (S.I. 2009/470) or the Education (Student Loans) (Repayments) Regulations (Northern Ireland) 2000 (S.R. 2000 No. 121).

(3)But the first failure during a tax year to make one of those payments (or to pay an amount comprising two or more of those payments) does not count as a default for that tax year.

(4)If P makes 1, 2 or 3 defaults during the tax year, the amount of the penalty is 1% of the amount of the tax comprised in the total of those defaults.

(5)If P makes 4, 5 or 6 defaults during the tax year, the amount of the penalty is 2% of the amount of the tax comprised in the total of those defaults.

(6)If P makes 7, 8 or 9 defaults during the tax year, the amount of the penalty is 3% of the amount of the tax comprised in the total of those defaults.

(7)If P makes 10 or more defaults during the tax year, the amount of the penalty is 4% of the amount of the tax comprised in the total of those defaults.

(8)For the purposes of this paragraph—

(a)the amount of a tax comprised in a default is the amount of that tax comprised in the payment which P fails to make;

(b)a default counts for the purposes of sub-paragraphs (4) to (7) even if it is remedied before the end of the tax year.

(9)The Treasury may by order made by statutory instrument make such amendments to sub-paragraph (2) as they think fit in consequence of any amendment, revocation or re-enactment of the regulations mentioned in that sub-paragraph.”

Commencement Information