Income Tax (Earnings and Pensions) Act 2003 section 40J

Assessment of penalties

Section 40J sets out the rules governing how HMRC must assess and notify penalties imposed on scheme organisers, including the time limits for making assessments and the payment deadlines.

• HMRC must formally assess any penalty and notify the scheme organiser, generally within 12 months of the liability arising.
• Extended time limits apply for penalties relating to inaccuracies (12 months from HMRC becoming aware, subject to a 6-year backstop) and for certain penalties where an appeal has been lodged (12 months from the appeal being determined or withdrawn).
• Payment is due within 30 days of the penalty notice, or if an appeal is made, within 30 days of the appeal being determined or withdrawn.
• Penalties are enforceable as if they were corporation tax (or income tax where the scheme organiser is not within the charge to corporation tax), and the general penalty determination provisions in Sections 100 to 103 of the Taxes Management Act 1970 do not apply.