Revenue & Customs Brief No 29/08

Learn how your clients can avoid penalties

We have published a learning package to help agents and taxpayers understand the new penalty regime.

This package, published on our website, is also being rolled out to 28,000 of our staff.

The module takes less than half an hour to complete and provides an overview of the new system.

It will help advisers understand the potential impact on their clients. During this financial year they have the opportunity to help their clients identify and correct potential errors and weaknesses in their systems before the new penalty regime starts from 1 April 2009.

The new penalties

The key points are:

  • the new penalties are one of the first pieces of cross-cutting legislation designed to make the tax system simpler and more consistent
  • if taxpayers take reasonable care to get their tax right, we will not penalise them, even if they make a mistake
  • if they do not take reasonable care, errors will be penalised and the penalties will be higher if the error is deliberate
  • telling us about errors, especially if this is unprompted, can substantially reduce any penalty due

Most people take care to fill in their tax returns and documents correctly. We want to encourage that and help them get it right. It uses penalties to stop people who do not take care from gaining an unfair advantage.

Taxes affected

The new penalties are for errors on returns and documents initially for Income Tax, VAT, PAYE and National Insurance contributions (NICs) paid by employers, Capital Gains Tax, Corporation Tax and the Construction Industry Scheme.

For these taxes, it applies to returns or other documents for tax periods starting on or after 1 April 2008 that are due to be filed on or after 1 April 2009. The relevant legislation is Schedule 24 of Finance Act 2007.

This year’s Budget proposed to extend the new penalties to almost all the taxes we collect - see Budget Notice 96 (PDF 66K).

More information

In addition to the learning module, our Internet page for new penalties, has frequently asked questions, a leaflet, and technical guidance, which are updated. There is an email address for queries.

Revenue & Customs Brief 19/08 also explains in more detail how the penalties work.

Issued 12 June 2008