Commentary on Sections Part 5 - Penalties Sections 118-121 – Penalty for failure to make tax return
147.Section 118 provides that the penalty amount for a person who fails to make a tax return on or before the filing date (as defined by section 40) is £100.
148.Section 119 provides that the penalty amount for a person who continues to fail to make a tax return after 6 months after the filing date is the greater of 5% of the devolved tax owed and £300.
149.Section 120 provides for a further penalty where the failure to make a tax return continues for more than 12 months after the filing date. In these circumstances, the penalty is the greater of 5% of devolved tax owed and £300. If this failure is accompanied by a deliberate withholding of information which would enable or assist the WRA to assess the person’s liability, subsection (2) provides for an increased penalty which is the greater of 100% of the devolved tax owed and £300.
150.Section 121 provides the WRA with the power to reduce a penalty for failure to make a tax return where a person discloses information to the WRA which has been previously withheld by the failure to submit a tax return. Subsection (2) sets out three distinct elements, each of which may allow WRA to make a reduction: admission – telling WRA that information has been withheld; taking active steps – giving WRA reasonable help in assessing the amount of devolved tax unpaid as a result of the information being withheld; and access – allowing WRA access to the records to check the extent of any liability. Any reductions applied may reflect whether or not the disclosure was prompted or unprompted (i.e. whether or not the person has reason to believe that WRA is or is about to discover the information) and the quality (e.g. timing, nature and extent) of the information disclosed.