Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section 42

Penalty for failure to pay tax on time

Section 42 of Schedule 23 replaces section 122 of the Tax Collection and Management (Wales) Act 2016 with new provisions setting out the penalties that apply when a person fails to pay a devolved tax by the required date, including escalating penalties for continued non-payment.

• An initial penalty of 5% of the unpaid tax is charged when the tax remains unpaid after the penalty date, which is generally 30 days after the relevant filing or payment deadline.
• A detailed table specifies how the penalty date is calculated for different types of devolved tax liabilities, including land transaction tax, landfill disposals tax, WRA determinations, WRA assessments, amended or corrected returns, deferred amounts, and postponed amounts.
• If any tax remains unpaid six months after the day falling 30 days before the penalty date, a further penalty of 5% of the still-outstanding amount is charged.
• If any tax remains unpaid twelve months after the day falling 30 days before the penalty date, a second further penalty of 5% of the still-outstanding amount is charged, meaning total penalties can reach 15% of the unpaid tax.