Tax Collection and Management (Wales) Act 2016 section 127

Assessment of penalties under Chapter 2

Section 127 sets out the procedure that the Welsh Revenue Authority (WRA) must follow when assessing penalties for failure to make returns, pay tax on time, or pay amounts due in respect of tax credits, and explains when assessments may be supplemented or amended.

• When a penalty arises, WRA must formally assess it, notify the person concerned, and specify the period, transaction or amount to which the penalty relates.
• A penalty assessment may be combined with an assessment to a devolved tax, and supplementary assessments can be issued where an earlier penalty was based on an underestimate of the tax or amount due.
• Where WRA finds that the tax or amount on which a penalty was based was overstated, it may amend the assessment downwards by issuing a notice to the person liable.
• An amendment reducing a penalty does not change the original payment due date and may be made even after the normal time limit for raising the assessment has expired.