Guidance: Plastic Packaging Tax penalties

If you fail to register or register late

HMRC may charge you a ‘failure to notify’ penalty if you do not register for Plastic Packaging Tax or you register late.

The penalty is calculated as a percentage of the ‘potential lost revenue’. This is a percentage of the amount of the Plastic Packaging Tax which is unpaid because of the failure to notify.

When working out the penalty amount, we will consider:

• what caused the failure
• whether you told us about the failure before we discovered it
• how much assistance you gave us

You will not be charged a penalty for a failure to notify if all of these points apply:

• you have a reasonable excuse
• the failure was not deliberate
• you told us without unreasonable delay after your reasonable excuse ended

You can find more information in Compliance checks: penalties for failure to notify — CC/FS11.

In certain circumstances if you do not register when you should and there is evidence of serious non-compliance and you do not have a reasonable excuse, you will be committing an offence.

If convicted, you could face a prison term of up to 12 months (6 months in Northern Ireland). You may also have to pay one or both of:

• a fine up to £20,000
• 3 times the amount of potential tax lost

If you fail to submit a return or it’s late

You must submit your return no later than the last working day of the month following the end of the accounting period. You may be charged a penalty if you do not.

You may be charged a £100 penalty the first time you submit a return late and additional penalties for any further late returns.

If you submit a:

• second late return within 12 months of the previous late return ― you’ll be charged a penalty of £200
• third late return within 12 months of the previous late return ― you’ll be charged a penalty of £300
• fourth late return within 12 months of the previous late return ― you’ll be charged a penalty of £400

If your last late filing penalty was £400, and you submit a late return again within the next 12 months of your most recent late return, you‘ll be charged a £400 penalty.

If you are charged a penalty for submitting a return late, then submit the next 4 returns on time and then submit the next return late, you’ll be charged a £100 penalty again.

If your return is 6 months late

If you do not submit a return within 6 months of it being due, you’ll be charged a further penalty. The penalty will be the greater of either:

• 5% of what you owed in that return period
• £300

If your return is 12 months late

If you do not submit a return within 12 months of it being due, you’ll be charged an additional penalty. The penalty will be the greater of either:

• 5% of what you owed in that return period
• £300

If we think you have deliberately withheld information that would have helped us work out how much you owe, you may be liable to a penalty of up to 100% of what you owe.

If you pay late

If you do not pay the full amount of tax owed by the due date, which is the last working day of the month following the end of the accounting period, you’ll be charged a 5% penalty on the outstanding amount.

Further late penalties will be charged at 5% of tax owed by you if you have still not paid the tax after:

• 5 months
• 11 months

If your return or documents are not accurate

You may be charged a penalty if you submit a return or other documents that are inaccurate and this:

• results in tax being unpaid, understated or over-claimed
• was careless, deliberate or, deliberate and concealed

The penalty will be calculated as a percentage of the ‘potential lost revenue’. This is the additional amount of tax due as a result of correcting the inaccuracy.

When working out the penalty amount, we will consider:

• what caused the inaccuracy
• whether you told us about the inaccuracy before we discovered it
• how much assistance you gave us

You will not be charged a penalty for an inaccuracy if you took reasonable care to get things right. You can find further guidance on amending a previous tax return and Compliance checks for penalties of inaccuracies in returns or documents (CC/FS7a).

If you do not meet another requirement of the tax

You may be charged a fixed £500 penalty if you do not:

• keep your registration information up to date
• account and pay the tax correctly
• keep records
• notify HMRC if you temporarily take over a registered business due to death, incapacity or insolvency of the registered person
• adhere to secondary liability assessment notices
• adhere to joint and several liability notices
• keep your registration information up to date for your group of companies registration

Further penalties

Following this fixed penalty, you’ll also be charged a daily penalty of £40 until you meet the tax requirement.

Appeal a penalty

You can appeal against a penalty if you do not agree with it.

You may not have to pay some or all of a penalty if we agree you:

• had a reasonable excuse for submitting a return or paying tax late
• failed to meet a relevant requirement
• took reasonable care to avoid submitting an inaccurate return