Commentary

A4.566A FA 2021 late payment penalty (prospective)

Administration and compliance

A4.566A FA 2021 late payment penalty (prospective)

A4.566A FA 2021 late payment penalty (prospective)

For income tax self assessment (ITSA) taxpayers, the penalty regime described below replaces the harmonised regime at A4.560 from a date to be appointed by the Treasury via regulations1. See the HMRC technical note: Penalties for late payment and interest harmonisation. For ITSA taxpayers with business or property business turnover of more than £10,000 per year, who will be required to submit digital quarterly updates via Making Tax Digital (MTD) (see A4.172), the new regime is expected to take effect from 6 April 2024. For all other ITSA taxpayers, it is expected to take effect from 6 April 20252. The new regime will also apply to Value Added Tax.

In its application to income tax and capital gains tax , the late payment penalty has effect in relation to3:

  1.  

    (1)     a balancing payment due under self assessment

  2.  

    (2)     an amount of tax becoming due as a result of the amendment or correction of a personal or trustees' tax return by the taxpayer or by HMRC or the amendment of a partner's tax return to give effect to the amendment or correction of the partnership return

  3.  

    (3)     an amount of tax payable by virtue of an assessment other than a self assessment or a simple assessment

  4.  

    (4)     an amount of tax becoming due as a result of an HMRC determination being superseded by a self assessment (see A6.304

  5.  

    (5)     an amount of tax payable by virtue of a 'simple assessment' (see A4.306)

  6.  

    (6)     an amount

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