V5: Other penalties
Failure to notify
"A penalty is payable by a person (P) where P fails to comply with an obligation specified in the Table below (a “relevant obligation”)." (FA 2008, Sch 41, para 1)
Penalties for special returns
See TMA 1970, s.98
PAYE and CIS penalties
See TMA 1970, s.98A
DOTAS penalties (failure to notify etc.)
See TMA 1970, s.98C
HMRC must commence penalty proceedings before the FTT
" The relevant legislation is to be found in Sections 98C, 100C and 118 TMA. The first sets out the penalty provisions. The effect of Section 100 TMA is that an HMRC officer is not permitted to make a determination to impose a penalty for non compliance with a promoter’s obligations under Section 308(3) FA 2004. The officer must commence penalty proceedings before the FTT. Section 118 is the reasonable excuse provision." (HMRC v. Hyrax Resourcing Limited  UKFTT 218 (TC), Judge Anne Scott)
Whether scheme is substantially the same as a previously disclosed scheme
" Like the Court in Walapu at paragraph 168 we find, as did Judge Mosedale in the DOTAS Decision, that the two schemes and, in the case of the DOTAS Decision, the previous schemes also, were very similar economically and financially but they are fundamentally different in both their factual and legal consequences.
 Patently, the sole point of the Hyrax arrangements, as Judge Mosedale, and we, have found, was to render the ineffective K2 arrangements effective.
 As Sir Duncan Ouseley pointed out, and Judge Mosedale and we have found, the whole purpose of the Hyrax arrangements was to obtain a tax advantage. The very obvious purpose of the legislation is to prevent that.
 We find that, for all of these reasons, K2 and the Hyrax arrangements are not “substantially the same” and therefore Hyrax’s argument on deemed disclosure by no later than 2 June 2017 fails." (HMRC v. Hyrax Resourcing Limited  UKFTT 218 (TC), Judge Anne Scott)
Amount of penalty
" We accept HMRC’s argument that the penalty imposed should act as a deterrent. It should certainly do so to deter others from deliberately setting up a company with a sole director who can at best be described as displaying Nelsonian acuity in regard to the company’s affairs. It should also act to deter those who rely only on the advice of the promoter of the tax avoidance scheme and a promoter who makes large sums of money from it.
 We do not accept that the question as to whether the Hyrax arrangements were notifiable was extremely complex and therefore that was a reason for non-compliance. Sir Duncan Ouseley rightly described it as being a “rigmarole”.
 The Hyrax arrangements had ceased to operate before the matter reached the Tribunal so no remedial action was possible.
 We have considered all of the factors identified in Tager and weighed all relevant circumstances in the balance. We are particularly mindful of the fact that David Gill sought to hide behind Joanne Macnamara whilst at all times being actively involved.
 We find that this was a very serious matter and the statutory maximum penalty is appropriate. The statutory maximum penalty for the period 9 April 2014 to 5 March 2019, being 1,791 days at £600 per day totals £1,074,600." (HMRC v. Hyrax Resourcing Limited  UKFTT 218 (TC), Judge Anne Scott)
Penalty for inaccurate certificate of non-liability to income tax (deduction of tax at source)
See TMA 1970, s.99A
Refusing to allow a deduction of income tax
"(1) A person who refuses to allow a deduction of income tax authorised by the Taxes Acts to be made out of any payment shall incur a penalty of £50.
(2) Every agreement for payment of interest, rent or other annual payment in full without allowing any such deduction shall be void." (TMA 1970, s.106)
Penalties for failing to give notice etc. of a company ceasing to be UK resident
See TMA 1970 s.109C - 109D
SDLT: failing to keep and preserve records
"(1) A person who fails to comply with paragraph 9 in relation to a transaction is liable to a penalty not exceeding £3,000, subject to the following exception.
(2) No penalty is incurred if the Inland Revenue are satisfied that any facts that they reasonably require to be proved, and that would have been proved by the records, are proved by other documentary evidence provided to them." (FA 2003, Sch 10, para 11)
- VAT return not filed electronically
"(15) Subject to paragraph (15A) in relation to returns made for prescribed accounting periods which end on or after 31 March 2011, a person who fails to comply with paragraph (2A) or (3) above is liable to a penalty.
(16) But a person who has a reasonable excuse for so failing to comply is not liable to a penalty.
(17) The table below sets out the penalties depending on the level of turnover.
Annual VAT exclusive turnover Penalty
£22,800,001 and above £400
£5,600,001 to £22,800,000 £300
£100,001 to £5,600,000 £200
£100,000 and under £100
(18) A person may appeal against the Commissioners' decision to impose a penalty only on the ground that—
(a) that person is not a person required to make a return required by regulation 25 using an electronic return system or a compatible software return system,
(b) the amount of the penalty is incorrect,
(c) paragraph (3) above was complied with, or
(d) paragraph (16) above applies.
(19) In calculating a person's annual VAT exclusive turnover for the purposes of the table in paragraph (17) above, the Commissioners shall use any available figures which they determine to be fair and reasonable in the circumstances and such figures shall be taken to be the correct figures for the purposes of the calculation." (SI 1995/2518, r.25A(15) - (19))
- incorrect zero-rating certificate
VATA 1994, s.62
- breaches of regulatory provisions
VATA 1994, s.69
Must receive prior written warning
"(2) Where a person is liable to a penalty under section 69 for any failure to comply with such a requirement as is referred to in subsection (1)(c) to (f) of that section, no assessment shall be made under this section of the amount due from him by way of such penalty unless, within the period of 2 years preceding the assessment, the Commissioners have issued him with a written warning of the consequences of a continuing failure to comply with that requirement." (VATA 1994, s.76(2))
- breaches of record keeping requirements
VATA 1994, s.69A and 69B
- transactions connected with fraud
VATA 1994, s.69C -69E
- issue of invoice showing VAT by unauthorised person
"(1) A penalty is payable by a person (P) where P makes an unauthorised issue of an invoice showing VAT.
(2) P makes an unauthorised issue of an invoice showing VAT if P—
(a) is an unauthorised person, and
(b) issues an invoice showing an amount as being value added tax or as including an amount attributable to value added tax.
(3) In sub-paragraph (2)(a) “an unauthorised person” means anyone other than—
(a) a person registered under VATA 1994,
(b) a body corporate treated for the purposes of section 43 of that Act as a member of a group,
(c) a person treated as a taxable person under regulations under section 46(4) of that Act,
(d) a person authorised to issue an invoice under regulations under paragraph 2(12) of Schedule 11 to that Act, or
(e) a person acting on behalf of the Crown.
(4) This paragraph has effect in relation to any invoice which—
(a) for the purposes of any provision made under subsection (3) of section 54 of VATA 1994 shows an amount as included in the consideration for any supply, and
(b) either fails to comply with the requirements of any regulations under that section or is issued by a person who is not for the time being authorised to do so for the purposes of that section,
as if the person issuing the invoice were an unauthorised person and that amount were shown on the invoice as an amount attributable to value added tax." (FA 2008, Sch 41, para 2)
- Putting product to use that attracts higher duty
"(1) A penalty is payable by a person (“P”) where P does an act which enables HMRC to assess an amount as duty due from P under any of the provisions in the Table below (a “relevant excise provision”)." (FA 2008, Sch 41, para 3)
"(2) A penalty is payable by a person (“P”) where P supplies a product knowing that it will be used in a way which enables HMRC to assess an amount as duty due from another person under a relevant excise provision." (FA 2008, Sch 41, para 3)
- Handling goods subject to unpaid excise duty
"(1) A penalty is payable by a person (P) where—
(a) after the excise duty point for any goods which are chargeable with a duty of excise, P acquires possession of the goods or is concerned in carrying, removing, depositing, keeping or otherwise dealing with the goods, and
(b) at the time when P acquires possession of the goods or is so concerned, a payment of duty on the goods is outstanding and has not been deferred.
(1A) A penalty is payable by a person (P) where—
(a) after a charge to soft drinks industry levy has arisen in respect of chargeable soft drinks, P acquires possession of them or is concerned with carrying, removing, depositing, keeping or otherwise dealing with them, and
(b) at the time when P acquires possession of the chargeable soft drinks or is so concerned, a payment of soft drinks industry levy in respect of the chargeable soft drinks is due or payable and has not been paid.
(2) In this paragraph—
“excise duty point” has the meaning given by section 1 of F(No 2)A 1992 [(and includes any excise duty point created or deemed to be created as a result of provision in regulations under section 45 of the Taxation (Cross-border Trade) Act 2018 (general regulation making power for excise duty purposes etc)), and
“goods” has the meaning given by section 1(1) of CEMA 1979.
“chargeable soft drinks” has the same meaning as in Part 2 of FA 2017." (FA 2008, Sch 41, para 4)