Introduction Suspension of penalty during currency of agreement for deferred payment
22.Paragraph 10(1) sets out the circumstances in which this paragraph will apply.
23.Paragraph 10(2) removes liability for penalties under this Schedule from the date a request for deferral is received until the end of the deferral period.
24.Paragraph 10(3) provides that if the taxpayer breaks the agreement (as defined in sub-paragraph 4) and HMRC serves a notice specifying to which penalties they would become liable, they become liable to that penalty from the date of the notice. This provision effectively enables HMRC on issue of a notice to reinstate a liability that has been removed under paragraph 10(2).
25.Paragraph 10(5) applies the paragraph if the agreement between HMRC and the taxpayer is varied. This means that if an agreement is extended, paragraph 10(2) applies to remove any liability to a penalty for the extended agreement period.