When does a penalty arise under Schedule 1, paragraph 12 of the Savings (Government Contributions) Act 2017?

A penalty arises when a person provides materially inaccurate information or documents in response to an HMRC information notice concerning a Lifetime ISA bonus claim or withdrawal charge. The inaccuracy must be careless, deliberate, known but unreported at the time, or discovered later without reasonable steps taken to notify HMRC.

What are the three conditions that trigger a penalty for inaccurate information under this provision?

The three conditions are: first, the inaccuracy was careless or deliberate, where careless means the person failed to take reasonable care; second, the person knew the information was inaccurate when provided but did not inform HMRC; third, the person discovered the inaccuracy later but failed to take reasonable steps to notify HMRC.

What is the maximum penalty for each material inaccuracy under Schedule 1, paragraph 12?

The maximum penalty for each material inaccuracy is the amount specified in paragraph 40A(5) of Schedule 36 to the Finance Act 2008. If an information response contains more than one material inaccuracy, a separate penalty is payable for each individual inaccuracy, each subject to the same maximum amount.

How are penalties under this provision assessed and appealed?

The assessment, appeal, and enforcement rules follow the framework in paragraphs 46 to 49 and 52 of Schedule 36 to the Finance Act 2008. This means the existing procedural safeguards and rights of appeal for information notice penalties under the Finance Act 2008 apply equally to penalties under this Lifetime ISA provision.

Savings (Government Contributions) Act 2017 section Sch 1 para 12

Penalties for inaccurate information or documents

Schedule 1, paragraph 12 sets out the penalties that apply when a person provides inaccurate information or documents in response to HMRC information notices relating to Lifetime ISA bonus claims or withdrawal charges.

A penalty arises where a person provides materially inaccurate information or documents in response to an HMRC information notice concerning a Lifetime ISA bonus claim or withdrawal charge, and the inaccuracy was careless, deliberate, or subsequently discovered but not reported.
An inaccuracy is treated as careless if the person failed to take reasonable care, and a person who knows about an inaccuracy at the time of providing the information but does not tell HMRC is also liable.
If a person discovers the inaccuracy later and fails to take reasonable steps to inform HMRC, a penalty also applies.
The maximum penalty for each material inaccuracy is the amount specified in paragraph 40A(5) of Schedule 36 to the Finance Act 2008, and the assessment, appeal and enforcement rules from that Schedule also apply.

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