Finance Act 2021

8 (1) Schedule 35 (penalties) is amended as follows.

(2) In paragraph 1—

(a) before paragraph (a) insert—

“(za) section 236C(1) (duty to make return to HMRC);”;

(b) omit paragraph (g);

(c) after paragraph (h) insert—

“(i) paragraph 1, 2, 5 or 5A of Schedule 36 of FA 2008 (information and inspection powers) as it has effect as a result of section 272A.”

(3) In paragraph 2—

(a) in sub-paragraph (1)—

(i) the words from “fails” to the end become paragraph (a);

(ii) in that paragraph, for “provision” substitute “duty”;

(iii) after that paragraph insert “, or—

(b) deliberately obstructs an officer of Revenue and Customs in the course of an inspection under paragraph 10 of Schedule 36 to FA 2008, as it has effect as a result of section 272A, that has been approved by the tribunal is liable to a penalty not exceeding the relevant amount (see sub-paragraph (3A)).”;

(b) in that sub-paragraph, in the Table, before the first entry insert—

“Section 236B(1) (promotion of arrangements or proposal of a description specified in a stop notice)	the relevant amount (see subparagraphs (2A) and (2B))
Section 236B(3)(a), (4)(a) or (5)(a) (requirement to notify persons who are subject to a stop notice)	£10,000
Section 236B(3)(b), (4)(b) or (5)(b) (requirement to notify HMRC of persons who are subject to a stop notice)	£25,000
Section 236C(1) (duty to make return to HMRC)	£5,000
Section 236J(1) (requirement to notify clients and intermediaries of stop notice)	£5,000”;

(c) in that Table, at the end insert—

“Duty to comply with a notice given under paragraph 1 of Schedule 36 to FA 2008 as it has effect as a result of section 272A	the relevant amount (see sub-paragraph (3A))
Duty to comply with a notice given under paragraph 2, 5 or 5A of Schedule 36 to FA 2008 as it has effect as a result of section 272A	the relevant amount (see sub-paragraph (3B))”;

(d) in that Table—

(i) in the heading of the first column, after “Provision” insert “or duty”;

(ii) omit the entry relating to section 262 (duty to provide information required to monitor compliance with conduct notice);

(e) after sub-paragraph (1) insert—

“(1A) In relation to a failure to comply with section 236C(1) the maximum penalty specified in column 2 of the Table is a maximum penalty which may be imposed—

(a) in respect of each failure to provide the required information or statement (see section 236C(6)) about a relevant client (within the meaning given by that section), and

(b) for each day on which a complete return is not provided after the end of the period within which it must be provided (see section 236C(7)).”;

(f) in sub-paragraph (2), after “section” insert “236B(3), (4) or (5), 236J(1),”;

(g) after sub-paragraph (2) insert—

“(2A) In relation to a failure to comply with section 236B(1), the “relevant amount” is the sum of—

(a) £100,000 in respect of one or more failures relating to a particular stop notice, and

(b) £5,000 for each person to whom arrangements of a description specified in that stop notice, or a proposal for such arrangements, were promoted (within the meaning it has in that section).

(2B) Where a person fails to comply with section 236B(1) at a time when the person, or another person who the person controls or has significant influence over, is subject to a monitoring notice, sub-paragraph (2A) applies as if—

(a) in paragraph (a), for “£100,000” there were substituted “£250,000”, and

(b) in paragraph (b), for “£5,000” there were substituted “£10,000”.

(2C) If the maximum penalty that would apply as a result of sub-paragraph (2B) in a particular case appears inappropriately low after taking account of the considerations in sub-paragraph (4), sub-paragraph (2B)(a) applies as if for “£250,000” there were substituted “£1,000,000”.”;

(h) after sub-paragraph (3) insert—

“(3A) Where a person fails to comply with a notice given under paragraph 1 of Schedule 36 to FA 2008 (as it has effect as a result of section 272A) or deliberately obstructs an officer of Revenue and Customs in the course of an inspection under paragraph 10 of that Schedule (as it has effect as a result of that section) that has been approved by the tribunal, the “relevant amount” is—

(a) in the case of a failure by a person who was subject to a monitoring notice at the time of the failure, or who had control of or had significant influence over such a person, £1,000,000, and

(b) in any other case, £5,000.

(3B) In relation to a failure to comply with a notice given under paragraph 2, 5 or 5A of that Schedule as it has effect as a result of section 272A, the “relevant amount” is the amount for the time being specified in paragraph 39(2) of that Schedule.”;

(i) in sub-paragraph (4)—

(i) in paragraph (a)—

(a) for “to comply with section 255 or 257” substitute “relating to any arrangements or proposal promoted by a person”;

(b) for the words from “monitored proposal, arrangements” to the end substitute “those arrangements or that proposal”;

(ii) in paragraph (b)—

(a) for the words from “the case” to “(5)” substitute “such a case”;

(b) omit “by the person”;

(c) omit “monitored” in both places;

(d) after “proposal” insert “(including, where the person liable to the penalty is the promoter of those arrangements or that proposal, any advantage that was gained or sought to be gained by the persons to whom the arrangements or proposal were promoted)”;

(j) after sub-paragraph (4) insert—

“(5) The references in sub-paragraph (4) to arrangements or a proposal being “promoted” are to be construed in accordance with section 236A(7).

(6) Sub-paragraphs (5) to (11) of paragraph 13A of Schedule 34 (meaning of “control” and “significant influence”) apply to this paragraph as they apply to Part 2 of that Schedule.”

(4) In paragraph 3, in sub-paragraph (1), after “information duty” insert “, other than a duty arising under section 236C(1),”.

(5) In paragraph 4—

(a) in sub-paragraph (1)(a), after “information duty” insert “or a requirement to provide evidence under section 236D(2)(d) or 236F(3)(c)”;

(b) in sub-paragraph (8)—

(i) in paragraph (a), after “258” insert “, or under Schedule 36 to FA 2008 as it has effect as a result of section 272A in a case where the person required to provide the information or produce the document was at the time subject to a monitoring notice;

(ii) in paragraph (c)—

(a) after “section” insert “236C(1), 236D(2)(d), 236F(3)(c),”;

(b) omit “, 262”;

(c) after “263” insert “or under Schedule 36 to FA 2008 as it has effect as a result of section 272A in a case not falling within paragraph (a)”;.

(6) In paragraph 6(1) in sub-paragraph (1) for “, 257 or 262” substitute “or 257 or under Schedule 36 of FA 2008 as it has effect as a result of section 272A”.

(7) In paragraph 7—

(a) in sub-paragraph (1), for “255, 257 or 262” substitute “section 255 or 257, or under Schedule 36 of FA 2008 as it has effect as a result of section 272A,”;

(b) in sub-paragraph (2), in paragraph (b), for “255, 257 or 262” substitute “section 255 or 257, or under Schedule 36 of FA 2008 as it has effect as a result of section 272A,”.

(8) In paragraph 10, in paragraph (b)—

(a) the words from “a penalty under paragraph 3” to the end become sub-paragraph (i);

(b) after that sub-paragraph insert—

“(ii) a penalty in respect of a failure to comply with section 236B(1) unless an officer of Revenue and Customs authorised for the purposes of section 100 of TMA 1970 considers that paragraph 2(2C) of this Schedule applies in relation to that failure;

(iii) a penalty in respect of a failure to comply with section 236B(3), (4) or (3), 236C(1) or 236J(1);

(iv) a penalty in respect of a failure to comply with a notice given under paragraph 1 of Schedule 36 to FA 2008 as it has effect as a result of section 272A unless paragraph 2(3A)(a) of this Schedule applies in relation to that failure;

(v) a penalty in respect of a failure to comply with a notice given under paragraph 2, 5 or 5A of Schedule 36 to FA 2008 as it has effect as a result of section 272A.”