New Penalty Provisions
HRMC have published two draft Orders (Schedules 40 and 41) which confirm the planned introduction of additional penalty provisions as part of Finance Act 2008.
Schedule 40 extends the previous penalties for incorrect returns and introduces new provisions in respect of errors in a taxpayer’s document which is attributable to a third party. The Schedule also preserves the existing penalty provisions for tax evasion where dishonest conduct is not reflected in inaccurate returns or under-assessments by HMRC.
The provisions in Schedule 40 will come into force (subject to parliamentary approval) on 1 April 2009 and apply to tax periods commencing on or after this date where the due date for the return falls on or after 1 April 2010.
Schedule 41 introduces a single penalty regime for failure to notify HMRC of chargeability to tax or liability to register. The Schedule also introduces penalties for the unauthorised issue of a VAT invoice and certain provisions relating to excise duty.
The provisions in Schedule 41 will come into force (subject to parliamentary approval) on 1 April 2010 and will apply for obligatations or wrongdoings arising or taking place from this date onwards.