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Finance Bill (Volume II)
Schedule 36 — Information and inspection powers
Part 7 — Penalties

392

 

      (7)  

Where a third party notice or a notice under paragraph 5 is given to one of

the partners for the purpose of checking the tax position of one or more of

the other partners, that partner may not appeal against a requirement in the

notice to produce any document that forms part of that partner’s statutory

records.

Application to the Crown

38         

This Schedule (other than Part 8) applies to the Crown, but not to Her

Majesty in Her private capacity (within the meaning of the Crown

Proceedings Act 1947 (c. 44)).

Part 7

Penalties

Standard penalties

39    (1)  

This paragraph applies to a person who—

(a)   

fails to comply with an information notice, or

(b)   

deliberately obstructs an officer of Revenue and Customs in the

course of an inspection under Part 2 of this Schedule that has been

approved by the First-tier Tribunal.

      (2)  

A person to whom this paragraph applies is liable to a penalty of £300.

      (3)  

The reference in this paragraph to a person who fails to comply with an

information notice includes a person who conceals, destroys or otherwise

disposes of, or arranges for the concealment, destruction or disposal of, a

document in breach of paragraph 42 or 43.

Daily default penalties

40    (1)  

This paragraph applies if the failure or obstruction mentioned in paragraph

39(1) continues after the date on which a penalty is imposed under that

paragraph in respect of the failure or obstruction.

      (2)  

The person is liable to a further penalty or penalties not exceeding £60 for

each subsequent day on which the failure or obstruction continues.

Power to change amount of standard and daily default penalties

41    (1)  

If it appears to the Treasury that there has been a change in the value of

money since the last relevant date, they may by regulations substitute for the

sums for the time being specified in paragraphs 39(2) and 40(2) such other

sums as appear to them to be justified by the change.

      (2)  

In sub-paragraph (1), “relevant date” means—

(a)   

the date on which this Act is passed, and

(b)   

each date on which the power conferred by that sub-paragraph has

been exercised.

      (3)  

Regulations under this paragraph do not apply to any failure or obstruction

which began before the date on which they come into force.

 
 

Finance Bill (Volume II)
Schedule 36 — Information and inspection powers
Part 7 — Penalties

393

 

Concealing, destroying etc documents following information notice

42    (1)  

A person must not conceal, destroy or otherwise dispose of, or arrange for

the concealment, destruction or disposal of, a document that is the subject of

an information notice addressed to the person (subject to sub-paragraphs (2)

and (3)).

      (2)  

Sub-paragraph (1) does not apply if the person acts after the document has

been produced to an officer of Revenue and Customs in accordance with the

information notice, unless an officer of Revenue and Customs has notified

the person in writing that the document must continue to be available for

inspection (and has not withdrawn the notification).

      (3)  

Sub-paragraph (1) does not apply, in a case to which paragraph 8(1) applies,

if the person acts after the expiry of the period of 6 months beginning with

the day on which a copy of the document was produced in accordance with

that paragraph unless, before the expiry of that period, an officer of Revenue

and Customs made a request for the original document under paragraph

8(2)(b).

Concealing, destroying etc documents following informal notification

43    (1)  

A person must not conceal, destroy or otherwise dispose of, or arrange for

the concealment, destruction or disposal of, a document if an officer of

Revenue and Customs has informed the person that the document is, or is

likely, to be the subject of an information notice addressed to that person

(subject to sub-paragraph (2)).

      (2)  

Sub-paragraph (1) does not apply if the person acts after—

(a)   

at least 6 months has expired since the person was, or was last, so

informed, or

(b)   

an information notice has been given to the person requiring the

document to be produced.

Failure to comply with time limit

44         

A failure by a person to do anything required to be done within a limited

period of time does not give rise to liability to a penalty under paragraph 39

or 40 if the person did it within such further time, if any, as an officer of

Revenue and Customs may have allowed.

Reasonable excuse

45    (1)  

Liability to a penalty under paragraph 39 or 40 does not arise if the person

satisfies HMRC or (on appeal) the First-tier Tribunal that there is a

reasonable excuse for the failure or the obstruction of an officer of Revenue

and Customs.

      (2)  

For the purposes of this paragraph—

(a)   

an insufficiency of funds is not a reasonable excuse unless

attributable to events outside the person’s control,

(b)   

where the person relies on any other person to do anything, that is

not a reasonable excuse unless the first person took reasonable care

to avoid the failure or obstruction, and

(c)   

where the person had a reasonable excuse for the failure or

obstruction but the excuse has ceased, the person is to be treated as

 
 

Finance Bill (Volume II)
Schedule 36 — Information and inspection powers
Part 7 — Penalties

394

 

having continued to have the excuse if the failure is remedied, or the

obstruction stops, without unreasonable delay after the excuse

ceased.

Assessment of standard penalty or daily default penalty

46    (1)  

Where a person becomes liable for a penalty under paragraph 39 or 40,

HMRC may—

(a)   

assess the penalty, and

(b)   

notify the person.

      (2)  

An assessment of a penalty under paragraph 39 or 40 must be made within

12 months of the relevant date.

      (3)  

In sub-paragraph (2), “the relevant date” means—

(a)   

in a case involving an information notice against which a person may

appeal, the later of—

(i)   

the end of the period in which notice of an appeal against the

information notice could have been given, and

(ii)   

if notice of an appeal against the information notice is given,

the date on which the appeal is determined or withdrawn,

and

(b)   

in any other case, the date on which the person became liable to the

penalty.

Right to appeal against standard penalty or daily default penalty

47         

A person may appeal to the First-tier Tribunal against any of the following

decisions of an officer of Revenue and Customs—

(a)   

a decision that a penalty is payable by that person under paragraph

39 or 40, or

(b)   

a decision as to the amount of such a penalty.

Procedure on appeal against standard penalty or daily default penalty

48    (1)  

Notice of an appeal under paragraph 47 must be given—

(a)   

in writing,

(b)   

before the end of the period of 30 days beginning with the date on

which the notification under paragraph 46 was issued, and

(c)   

to HMRC.

      (2)  

Notice of an appeal under paragraph 47 must state the grounds of appeal.

      (3)  

On an appeal under paragraph 47(a), the First-tier Tribunal may confirm or

cancel the decision.

      (4)  

On an appeal under paragraph 47(b), the First-tier Tribunal may—

(a)   

confirm the decision, or

(b)   

substitute for the decision another decision that the officer of

Revenue and Customs had power to make.

      (5)  

Subject to this paragraph and paragraph 49, the provisions of Part 5 of TMA

1970 relating to appeals have effect in relation to appeals under this Part of

this Schedule as they have effect in relation to an appeal against an

assessment to income tax.

 
 

Finance Bill (Volume II)
Schedule 36 — Information and inspection powers
Part 7 — Penalties

395

 

Enforcement of standard penalty or daily default penalty

49    (1)  

A penalty under paragraph 39 or 40 must be paid—

(a)   

before the end of the period of 30 days beginning with the date on

which the notification under paragraph 46 was issued, or

(b)   

if a notice of an appeal against the penalty is given, before the end of

the period of 30 days beginning with the date on which the appeal is

determined or withdrawn.

      (2)  

A penalty under paragraph 39 or 40 may be enforced as if it were income tax

charged in an assessment and due and payable.

Tax-related penalty

50    (1)  

This paragraph applies where—

(a)   

a person becomes liable to a penalty under paragraph 39,

(b)   

the failure or obstruction continues after a penalty is imposed under

that paragraph,

(c)   

an officer of Revenue and Customs has reason to believe that, as a

result of the failure or obstruction, the amount of tax that the person

has paid, or is likely to pay, is significantly less than it would

otherwise have been,

(d)   

before the end of the period of 12 months beginning with the relevant

date (within the meaning of paragraph 46), an officer of Revenue and

Customs makes an application to the Upper Tribunal for an

additional penalty to be imposed on the person, and

(e)   

the Upper Tribunal decides that it is appropriate for an additional

penalty to be imposed.

      (2)  

The person is liable to a penalty of an amount decided by the Upper

Tribunal.

      (3)  

In deciding the amount of the penalty, the Upper Tribunal must have regard

to the amount of tax which has not been, or is not likely to be, paid by the

person.

      (4)  

Where a person becomes liable to a penalty under this paragraph, HMRC

must notify the person.

      (5)  

Any penalty under this paragraph is in addition to the penalty or penalties

under paragraph 39 or 40.

      (6)  

In the application of the following provisions, no account shall be taken of a

penalty under this paragraph—

(a)   

section 97A of TMA 1970 (multiple penalties),

(b)   

paragraph 12(2) of Schedule 24 to FA 2007 (interaction with other

penalties), and

(c)   

paragraph 15(1) of Schedule 41 (interaction with other penalties).

Enforcement of tax-related penalty

51    (1)  

A penalty under paragraph 50 must be paid before the end of the period of

30 days beginning with the date on which the notification of the penalty is

issued.

 
 

Finance Bill (Volume II)
Schedule 36 — Information and inspection powers
Part 8 — Offence

396

 

      (2)  

A penalty under paragraph 50 may be enforced as if it were income tax

charged in an assessment and due and payable.

Double jeopardy

52         

A person is not liable to a penalty under this Schedule in respect of anything

in respect of which the person has been convicted of an offence.

Part 8

Offence

Concealing etc documents following information notice

53    (1)  

A person is guilty of an offence (subject to sub-paragraph (2)) if—

(a)   

the person is required to produce a document by an information

notice,

(b)   

the First-tier Tribunal approved the giving of the notice in

accordance with paragraph 3 or 5, and

(c)   

the person conceals, destroys or otherwise disposes of, or arranges

for the concealment, destruction or disposal of, that document.

      (2)  

Sub-paragraph (1) does not apply if the person acts after the document has

been produced to an officer of Revenue and Customs in accordance with the

information notice, unless an officer of Revenue and Customs has notified

the person in writing that the document must continue to be available for

inspection (and has not withdrawn the notification).

      (3)  

Sub-paragraph (1) does not apply, in a case to which paragraph 8(1) applies,

if the person acts after the expiry of the period of 6 months beginning with

the day on which a copy of the document was so produced unless, before the

expiry of that period, an officer of Revenue and Customs made a request for

the original document under paragraph 8(2)(b).

Concealing etc documents following informal notification

54    (1)  

A person is also guilty of an offence (subject to sub-paragraph (2)) if the

person conceals, destroys or otherwise disposes of, or arranges for the

concealment, destruction or disposal of a document after the person has

been informed by an officer of Revenue and Customs in writing that—

(a)   

the document is, or is likely, to be the subject of an information notice

addressed to that person, and

(b)   

an officer of Revenue and Customs intends to seek the approval of

the First-tier Tribunal to the giving of the notice under paragraph 3

or 5 in respect of the document.

      (2)  

A person is not guilty of an offence under this paragraph if the person acts

after—

(a)   

at least 6 months has expired since the person was, or was last, so

informed, or

(b)   

an information notice has been given to the person requiring the

document to be produced.

 
 

Finance Bill (Volume II)
Schedule 36 — Information and inspection powers
Part 9 — Miscellaneous provisions and interpretation

397

 

Fine or imprisonment

55         

A person who is guilty of an offence under this Part of this Schedule is

liable—

(a)   

on summary conviction, to a fine not exceeding the statutory

maximum, and

(b)   

on conviction on indictment, to imprisonment for a term not

exceeding 2 years or to a fine, or both.

Part 9

Miscellaneous provisions and interpretation

Application of provisions of TMA 1970

56         

Subject to the provisions of this Schedule, the following provisions of TMA

1970 apply for the purposes of this Schedule as they apply for the purposes

of the Taxes Acts—

(a)   

section 108 (responsibility of company officers),

(b)   

section 114 (want of form), and

(c)   

section 115 (delivery and service of documents).

Regulations under this Schedule

57    (1)  

Regulations made by the Commissioners or the Treasury under this

Schedule are to be made by statutory instrument.

      (2)  

A statutory instrument containing regulations under this Schedule is subject

to annulment in pursuance of a resolution of the House of Commons.

General interpretation

58         

In this Schedule—

“checking” includes carrying out an investigation or enquiry of any

kind,

“the Commissioners” means the Commissioners for Her Majesty’s

Revenue and Customs,

“document” includes a part of a document (except where the context

otherwise requires),

“enactment” includes subordinate legislation (within the meaning of

the Interpretation Act 1978 (c. 30)),

“HMRC” means Her Majesty’s Revenue and Customs,

“premises” includes—

(a)   

any building or structure,

(b)   

any land, and

(c)   

any means of transport,

“the Taxes Acts” means—

(a)   

TMA 1970,

(b)   

the Tax Acts, and

(c)   

TCGA 1992 and all other enactments relating to capital gains

tax, and

 
 

Finance Bill (Volume II)
Schedule 36 — Information and inspection powers
Part 9 — Miscellaneous provisions and interpretation

398

 

“taxpayer”, in relation to a taxpayer notice or a third party notice, has

the meaning given in paragraph 1(1) or 2(1) (as appropriate).

Authorised officer of Revenue and Customs

59         

A reference in a provision of this Schedule to an authorised officer of

Revenue and Customs is a reference to an officer of Revenue and Customs

who is, or is a member of a class of officers who are, authorised by the

Commissioners for the purpose of that provision.

Business

60    (1)  

In this Schedule (subject to regulations under this paragraph), references to

carrying on a business include—

(a)   

the letting of property,

(b)   

the activities of a charity, and

(c)   

the activities of a government department, a local authority, a local

authority association and any other public authority.

      (2)  

In sub-paragraph (1)—

“charity” means a body of persons or trust established for charitable

purposes only,

“local authority” has the meaning given in section 999 of ITA 2007, and

“local authority association” has the meaning given in section 1000 of

that Act.

      (3)  

The Commissioners may by regulations provide that for the purposes of this

Schedule—

(a)   

the carrying on of an activity specified in the regulations, or

(b)   

the carrying on of such an activity (or any activity) by a person

specified in the regulations,

           

is or is not to be treated as the carrying on of a business.

Chargeable period

61         

In this Schedule, “chargeable period” means—

(a)   

in relation to income tax or capital gains tax, a tax year, and

(b)   

in relation to corporation tax, an accounting period.

Statutory records

62    (1)  

For the purposes of this Schedule, information or a document forms part of

a person’s statutory records if it is information or a document which the

person is required to keep and preserve under or by virtue of—

(a)   

the Taxes Acts, or

(b)   

VATA 1994 or any other enactment relating to value added tax

charged in accordance with that Act,

           

subject to the following provisions of this paragraph.

      (2)  

To the extent that any information or document that is required to be kept

and preserved under or by virtue of the Taxes Acts—

(a)   

does not relate to the carrying on of a business, and

 
 

 
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