Finance Act 2011

Section 86(2)

SCHEDULE 24 Amendments of Schedule 36 to FA 2008

1 Schedule 36 to FA 2008 (information and inspection powers) is amended as follows.

2 (1) Paragraph 5 (power to obtain information and documents about persons whose identity is not known) is amended as follows.

(2) In sub-paragraph (2), omit “UK”.

(3) In sub-paragraph (4)—

(a) in paragraph (b), for the words from “the Taxes Acts” to the end substitute “the law (including the law of a territory outside the United Kingdom) relating to tax,”, and

(b) in paragraph (c), omit “UK”.

(4) Omit sub-paragraph (5).

(5) The amendments made by this paragraph—

(a) come into force on 1 April 2012, and

(b) apply from then on in relation to tax regardless of when the tax became due (whether before, on or after that date).

3 (1) Paragraph 40A (penalties for inaccurate information and documents) is amended as follows.

(2) In sub-paragraph (1)(b), for “A or B” substitute “A, B or C”.

(3) After sub-paragraph (3) insert—

“(3A) Condition B is that the person knows of the inaccuracy at the time the information is provided or the document produced but does not inform HMRC at that time.”

(4) In sub-paragraph (4), for “B” substitute “C”.

(5) The amendments made by this paragraph have effect in relation to any inaccuracy in information provided, or in documents produced, on or after 1 April 2012.

4 (1) After paragraph 49 insert—

“Increased daily default penalty

49A (1) This paragraph applies if—

(a) a penalty under paragraph 40 is assessed under paragraph 46 in respect of a person’s failure to comply with a notice under paragraph 5,

(b) the failure continues for more than 30 days beginning with the date on which notification of that assessment was issued, and

(c) the person has been told that an application may be made under this paragraph for an increased daily penalty to be imposed.

(2) If this paragraph applies, an officer of Revenue and Customs may make an application to the tribunal for an increased daily penalty to be imposed on the person.

(3) If the tribunal decides that an increased daily penalty should be imposed, then for each applicable day (see paragraph 49B) on which the failure continues—

(a) the person is not liable to a penalty under paragraph 40 in respect of the failure, and

(b) the person is liable instead to a penalty under this paragraph of an amount determined by the tribunal.

(4) The tribunal may not determine an amount exceeding £1,000 for each applicable day.

(5) But subject to that, in determining the amount the tribunal must have regard to—

(a) the likely cost to the person of complying with the notice,

(b) any benefits to the person of not complying with it, and

(c) any benefits to anyone else resulting from the person’s non-compliance.

(6) Paragraph 41 applies in relation to the sum specified in sub-paragraph (4) as it applies in relation to the sums mentioned in paragraph 41(1).

49B (1) If a person becomes liable to a penalty under paragraph 49A, HMRC must notify the person.

(2) The notification must specify the day from which the increased penalty is to apply.

(3) That day and any subsequent day is an “applicable day” for the purposes of paragraph 49A(3).

49C (1) A penalty under paragraph 49A must be paid before the end of the period of 30 days beginning with the date on which the notification under paragraph 49B is issued.

(2) A penalty under paragraph 49A may be enforced as if it were income tax charged in an assessment and due and payable.”

(2) The amendment made by this paragraph has effect in relation to failures to comply with a notice under paragraph 5 that begin on or after 1 April 2012.

5 (1) Paragraph 50 (tax-related penalty) is amended as follows.

(2) In sub-paragraph (1)(d), omit “(within the meaning of paragraph 46)”.

(3) After sub-paragraph (6) insert—

“(7) In sub-paragraph (1)(d) “the relevant date” means—

(a) in a case involving an information notice against which a person may appeal, the latest of—

(i) the date on which the person became liable to the penalty under paragraph 39,

(ii) the end of the period in which notice of an appeal against the information notice could have been given, and

(iii) if notice of such an appeal is given, the date on which the appeal is determined or withdrawn, and

(b) in any other case, the date on which the person became liable to the penalty under paragraph 39.”

(4) The amendments made by this paragraph have effect where a person becomes liable to a penalty under paragraph 39 of Schedule 36 to FA 2008 on or after the day on which this Act is passed.

6 In paragraph 61A (involved third parties), in the first column of item 11 of the Table, after “receiving” insert “supplies of”.