Penalties and interest
In this lesson, you'll learn how HMRC applies penalties and interest to incorrect tax returns, late filings, and late payments—knowledge you need for TX and ATX papers.
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In this lesson
- 0:00 Interest and penalties overview
- 0:10 Behaviour related penalties explained
- 1:27 Calculating penalty based on lost revenue
- 2:12 Understanding reasonable care standard
- 3:26 Penalty percentages by mistake type
- 5:09 Late filing penalties and thresholds
- 6:34 Inadequate records and fixed penalties
- 8:16 Late payment of tax penalties
- 9:08 Reasonable excuse and when it applies
- 10:46 Interest charges on late payments
- 11:35 Appeals process and tax tribunal
About this lesson
You'll discover how behaviour-related penalties are calculated based on the nature of the error (careless, deliberate, or concealed), how disclosure—whether unprompted or prompted—reduces penalties, and why reasonable care matters in determining whether a penalty applies at all. The lesson also covers fixed penalties for late returns, the £3,000 penalty for inadequate records, late payment interest charged at 8.5%, and your right to appeal within 30 days. Understanding these rules helps you advise clients on minimising exposure and recognising when HMRC's decisions can be challenged.
Duration: 13m
Transcript
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