HMRC Penalties and Compliance Checks
The newly formed HMRC has new powers, both civil and criminal. In this section we explain what the new powers are, when they take place and how they might affect you and your business. See below for information on the changes already on the statute book, and also see the checklist of the penalties and compliance checks major points.
What changes are already on the statute book
Penalties
(a) Penalties for inaccurate returns (Schedule 24 FA 2007) - please click here for further details.
(b) Penalties for failing to notify a taxable activity and VAT and Excise wrong doing (Schedule 40 FA 2008) - please click here for further details.
(c) Penalties for failure to make returns etc (see BN90, Section 106 of, and Schedule 55 to the Finance Act 2009) - please click here for further details.
(d) Penalties for failure to pay tax (see BN90, Section 107 of, and Schedule 56 to the Finance Act 2009) - please click here for further details
(e) Penalties for a senior accounting officer failing to take reasonable steps to establish and monitor accounting systems that are adequate for the purposes of tax reporting (Budget Note 62, Sections 93 of and Schedule 46 to the Finance Act 2009) - please click here for further details.
(f) Interest on sums due to, or from, HMRC (see BN90, Section 101-105 of and Schedules 53 and 54 to the Finance Act 2009 - please click here for further details.
Compliance checks
(g) Power to obtain information (Schedule 36 FA 2008) – please click here for further details.
(h) Powers to inspect premises, and to inspect and remove documents (Schedule 36 FA 2008) – please click here for further details.
(i) Record keeping (Schedule 37 FA 2008) – please click here for further details.
(j) Time limits for discovery assessments (Schedule 39 FA 2008) – please click here for further details.
Others
(k) Tribunal changes – 1 April 2009 – please click here for further details.
(l) Reclaiming overpaid income tax, CGT and corporation tax (BN97, Section 100 of and Schedule 52 to the Finance Act 2009) – 1 April 2010 (subject to transitional provisions).
(m) Debt management powers – 1 April 2010.
Compliance checks
(n) Information and inspection powers - 1st April 2009 for VAT, IT (PAYE, NIC's & CIS as well), CT and CGT. For most other taxes, post 1st April 2010.
(o) Record keeping – these apply to VAT, IT, (PAYE) CT and CGT, with effect from 1st April 2009, and for most other taxes post 1st April 2010.
(p) Time limits for discovery assessments – 1 April 2011 (subject to transitional provisions between 2010 and 2011).
When do these changes bite?
(q) Penalties under (a) above – broadly speaking, as per (n) above.
(r) Penalties under (b) above – 1 April 2010.
(s) Penalties under (c) and (d) above – Penalties for PAYE will apply for April 2010. The remaining penalty provisions will be brought in over "a number of years" (see BN90 at para 8).
(t) Penalties for system inadequacies under (e) above – Royal Assent of Finance Bill 2009.
(u) Interest under (f) above – alignment of the interest rates will take effect on and from Royal Assent of Finance Bill 2009. But the implementation will be staggered. Interest on late payment of in year PAYE, in 2010.& For other taxes it will be brought in "over a number of years" (see BN91 at para 5).
What further changes are in the pipeline?
(v) Working with Tax Agents (see condoc published on 22.4.09)
(w) DOTAS for residential property (see condoc published on 22.4.09) – please click here for further details.
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HMRC Penalties and Compliance Checks.