Commentary on Sections Part 5 - Penalties Section 124-128 – Penalties under Chapter 2: general
153.Section 124 sets out how certain penalties should interact. Where a person is liable to one or more penalties under section 118 to 120, subsection (1) provides that the total amount of those penalties must not exceed the total amount of devolved tax. Subsection (2) provides that where a person is liable to a penalty under Chapter 2 and any other penalty arising in relation to a devolved tax liability (which is determined by the same devolved tax liability) the amount of the penalty under Chapter 2 is to be reduced by the amount of that other devolved tax penalty.
154.Section 125 provides that the WRA may, in special circumstances, reduce a penalty that has been applied due to either a failure to make a tax return or a failure to pay tax on or before the due date. The penalty can be remitted, suspended, or reduced following a WRA agreement to compromise with the person liable to the penalty. The special circumstances under which the penalty may be reduced do not include the person‘s ability to pay or by the fact that a potential loss of revenue from one person is balanced by a potential over-payment by another.
155.Section 126 provides that if a person satisfies WRA (or, on appeal, the tribunal), that there is reasonable excuse on the person‘s behalf for a failure to either make a return or make a payment, then the person is not liable to pay a penalty arising from that failure. The section also clarifies some circumstances in which a reasonable excuse does or does not apply.
156.Where a person is liable to a penalty resulting from this Chapter, Section 127 requires the WRA to assess the penalty and notify the person of the penalty and how it was assessed. The details of the assessment of the penalty by the WRA are also set out in the section. Section 128 requires the WRA to assess penalties within specified time limits.