A4.561 Late payment penalties—when is a penalty incurred?
The situations in which taxes can become due are varied. For example, a correct return may be filed but the tax liability it shows is not paid; incorrect returns may be made, accompanied by no payment or an incorrect amount; or it may be that no returns or payments are made at all. Therefore, FA 2009, Sch 56, as a comprehensive code for harmonised late payment penalties, has to encompass a wide variety of breaches of payment obligation.
Such obligations are listed in a table in the legislation which sets out the tax in question, the amount of tax payable, and the date after which a penalty is incurred1. The approach of the table is to divide the amounts payable into three sections, each reflecting a different category of mechanism for creating the liability to pay:
(a) principal amounts, ie self assessment and assessed liabilities arising from returns as made without amendment or correction
(b) amounts payable in default of a return being made, ie liabilities that follow from failures to make returns on time
(c) amounts shown to be due in other assessments, determinations etc. This is a 'sweep-up' category that covers liabilities that do not derive from returns as originally made (eg liabilities consequent on amendments and corrections to returns, postponed liabilities coming into charge, PAYE determinations) and that do not arise
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