Late payment penalties—income tax, capital gains tax and corporation tax
Produced in partnership with Philip Rutherford
Late payment penalties—income tax, capital gains tax and corporation tax

The following Tax practice note produced in partnership with Philip Rutherford provides comprehensive and up to date legal information covering:

  • Late payment penalties—income tax, capital gains tax and corporation tax
  • Income tax, capital gains tax and Class 4 NIC
  • Corporation tax
  • Current rules
  • New rules
  • Penalty reduction and suspension
  • Reasonable excuse
  • Special reduction
  • Suspended penalties

FORTHCOMING CHANGE: As announced at Spring Budget 2021, Finance Bill 2021 provides for substantial changes to the regime for VAT and income tax late payment penalties with effect from 1 April 2022 for VAT, 1 April 2023 for income tax self-assessment payers with business or property income over £10,000 per year, and from 1 April 2024 for all other income tax self-assessment payers. The new regime will entail a first penalty, set at 2% of the tax outstanding at day 15, rising to 4% of the tax outstanding if it remains outstanding at day 30, and a second penalty, accruing on a daily basis at a rate of 4% a year on the tax outstanding on and after day 31. For more details, see News Analysis: Spring Budget 2021—Tax analysis—Interest harmonisation and reform of penalties for late submission and late payment of tax. These provisions revive proposed plans which were originally intended to be in Finance Bill 2019 (see News Analysis: Legislation day: Draft Finance Bill 2019—Tax administration).

This Practice Note covers penalties on late paid tax under the income tax self assessment (ITSA) and corporation tax self assessment (CTSA) regimes. The ITSA regime also covers capital gains tax.

Late payment of tax will invariably attract interest (see Practice Note: Interest on late paid tax). In addition, late payment of tax may attract a penalty.

There

Related documents:

Popular documents