Legalize / United Kingdom / Wales / Act of Senedd Cymru

Tax Collection and Management (Wales) Act 2016

Type Act of Senedd Cymru

Publication 2016-04-25

Last updated 2025-09-19

State In force

Jurisdiction Wales

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(4) But the tribunal may disapply the requirements of paragraph (b) or (d) of subsection (3) to the extent that it is satisfied that taking the action specified in the paragraph might prejudice the assessment or collection of WRA-collected tax.

(5) In approving the issuing of a taxpayer notice or third party notice, the tribunal may make such modifications to the notice as it thinks appropriate.

Power to require information and documents about persons whose identity is not known

89

(1) WRA may issue a notice (an “unidentified third party notice”) requiring a person (“the recipient”) to provide information or produce a document if—

(a) WRA requires the information or document for the purpose of checking the tax position of—

(i) a person whose identity is not known to WRA, or

(ii) a class of persons whose individual identities are not known to WRA,

(b) it is reasonable to require the recipient to provide the information or produce the document,

(c) nothing in sections 97 to 102 prevents WRA from requiring the recipient to provide the information or produce the document, and

(d) the tribunal has approved the issuing of the notice.

(2) An application for approval may be made without notice.

(3) The tribunal may approve the issuing of the unidentified third party notice only if it is satisfied that—

(a) the requirements of subsection (1)(a) to (c) have been met,

(b) the information or document to which the notice relates is not readily available to WRA from another source,

(c) there are grounds for believing that the person or any of the class of persons to whom the notice relates may have failed or may fail to comply with any provision of the law relating to a WRA-collected tax, and

(d) any such failure is likely to have led or to lead to serious prejudice to the assessment or collection of WRA-collected tax.

(4) In approving the issuing of an unidentified third party notice, the tribunal may make such modifications to the notice as it thinks appropriate.

Requiring information and documents in relation to a group of undertakings

90

(1) This section applies where an undertaking is a parent undertaking in relation to a subsidiary undertaking.

(2) Where a third party notice is issued to any person for the purpose of checking the tax position of a parent undertaking and any of its subsidiary undertakings—

(a) the references in sections 87(2)(a), (3) and (4) and 88(3)(d) to the taxpayer have effect as if they were references to the parent undertaking, and

(b) section 87(3) is to be treated as also requiring the notice to state its purpose.

(3) Where a third party notice is issued to a parent undertaking for the purpose of checking the tax position of more than one subsidiary undertaking—

(a) the notice must state its purpose,

(b) sections 87(2)(a) and (3) and 88(3)(d) do not apply, and

(c) section 100 (taxpayer notices following a tax return) applies as if the third party notice were a taxpayer notice issued to each subsidiary undertaking (or, if the third party notice names the subsidiary undertakings to which it relates, to each of those undertakings).

(4) In this section, “parent undertaking”, “subsidiary undertaking” and “undertaking” have the meanings given in sections 1161 and 1162 of, and Schedule 7 to, the Companies Act 2006 (c. 46), but in the application of this section in relation to land transaction tax, section 1161(1)(b) of that 2006 Act has effect as if the words ““carrying on a trade or business, with or without a view to profit”” were omitted.

Requiring information and documents in relation to a partnership

91

(1) This section applies where a business is carried on by two or more persons in partnership.

(2) Where a third party notice is issued to someone other than one of the partners for the purpose of checking the tax position of more than one of the partners (in their capacity as such)—

(a) section 87(3) is to be treated as requiring WRA to—

(i) state that purpose,

(ii) name the taxpayer by giving a name by which the partnership is known or under which it is registered for any purpose, and

(iii) issue a copy of the notice to at least one of the partners,

(b) section 87(4) is to be treated as permitting the tribunal to disapply any or all of the requirements mentioned in paragraph (a) of this subsection, and

(c) the references to the taxpayer in sections 87(2)(a) and 88(3)(d) have effect as if they were references to at least one of the partners.

Power to obtain information to enable a person’s identity to be ascertained

92

(1) WRA may issue a notice (an “identification notice”) requiring a person to provide relevant information about another person (“the taxpayer”) only if the tribunal has approved the issuing of the notice.

(2) An application for approval may be made without notice.

(3) The tribunal may approve the issuing of the identification notice only if it is satisfied that conditions 1 to 6 are met.

(4) Condition 1 is that WRA requires the information for the purpose of checking the tax position of the taxpayer.

(5) Condition 2 is that it is reasonable to require the person to provide the relevant information.

(6) Condition 3 is that WRA—

(a) does not know the taxpayer's identity, but

(b) holds information from which the taxpayer's identity can be ascertained.

(7) Condition 4 is that WRA has grounds for believing—

(a) that the person will be able to ascertain the identity of the taxpayer from the information held by WRA, and

(b) that the person obtained relevant information about the taxpayer in the course of carrying on a business.

(8) Condition 5 is that the taxpayer's identity cannot readily be ascertained by other means from the information held by WRA.

(9) Condition 6 is that nothing in sections 97 to 102 prevents WRA from requiring the person to provide the relevant information.

(10) In this section, “relevant information” means all or any of the following—

(a) name,

(b) last known address, and

(11) This section also applies for the purpose of checking the tax position of a class of persons (and references to the taxpayer are to be read accordingly).

Power to obtain contact details for debtors

93

(1) WRA may issue a notice (a “debtor contact notice”) requiring a person (“the third party”) to provide contact details for another person (“the debtor”) only if conditions 1 to 5 are met.

(2) Condition 1 is that an amount by way of—

(a) WRA-collected tax,

(b) interest on WRA-collected tax,

(d) interest on a penalty relating to WRA-collected tax,

(e) a payment in respect of a tax credit, or

(f) interest on a payment in respect of a tax credit,

is payable by the debtor to WRA under an enactment or contract settlement.

(3) Condition 2 is that WRA requires contact details for the debtor for the purpose of collecting that amount.

(4) Condition 3 is that it is reasonable to require the third party to provide the details.

(5) Condition 4 is that—

(a) the third party is a body corporate or unincorporated association, or

(b) WRA has grounds for believing that the third party obtained the details in the course of carrying on a business.

(6) Condition 5 is that nothing in sections 97 to 102 prevents WRA from requiring the third party to provide the details.

(7) But WRA may not issue a debtor contact notice if—

(a) the third party is a charity and obtained the details in the course of providing services free of charge, or

(b) the third party is not a charity but obtained the details in the course of providing services on behalf of a charity that are free of charge to the recipient of the service.

(8) In this section, “contact details”, in relation to a person, means the person's address and any other information about how the person may be contacted.

Time limit for issuing a tribunal approved information notice

94

Where the tribunal has approved the issuing of an information notice WRA must issue the notice—

(a) no later than 3 months after the day on which the tribunal's approval was given, or

(b) within such shorter period as the tribunal may specify when giving the approval.

Complying with an information notice

95

(1) A person to whom an information notice is issued must comply with the notice—

(a) within the period specified in the notice (or such longer period as may be agreed to by WRA and the person), and

(b) in such manner as is specified or described in the notice.

(2) But if the person has requested a review of, or made an appeal against, the notice or a requirement in it, subsection (1)(a) ceases to apply to the notice or the requirement.

(3) Where an information notice requires a person to produce a document, it must be produced—

(a) at a place agreed to by that person and WRA, or

(b) at a place which WRA may specify.

(4) WRA must not specify for the purpose of subsection (3)(b) a place that is used solely as a dwelling.

(5) The production of a document in compliance with an information notice is not to be regarded as breaking any lien claimed on the document.

Producing copies of documents

96

(1) Unless an information notice requires a person to produce an original document, the person may comply with the notice by producing a copy of the document.

(2) Subsection (1) is subject to any conditions or exceptions specified in regulations made by the Welsh Ministers.

(3) Where a person complies with a notice by producing a copy of the document, WRA may subsequently require that person to produce the original document—

(a) within such period, and

(b) in such manner,

as WRA may specify.

(4) But a person is not required to produce the original document if a request is made by WRA more than 6 months after the day on which the copy of the document was produced.

CHAPTER 3 — RESTRICTIONS ON POWERS IN CHAPTER 2

Information notices: general restrictions

97

(1) An information notice requires a person to produce a document only if it is in the person's possession or power.

(2) An information notice may not require a person to produce a document if the whole of the document originates more than 6 years before the day on which the notice is issued, unless the notice is issued with the approval of the tribunal.

(3) An information notice issued for the purpose of checking the tax position of a person who has died may not be issued more than 4 years after the person's death.

(4) An information notice may not require a person to provide information or produce a document (or any part of a document) that relates to the conduct of a pending review or appeal relating to any tax (whether or not a WRA-collected tax).

Protection for journalistic material

98

(1) An information notice may not require a person to provide or produce journalistic material.

(2) “Journalistic material” means information or a document which is—

(a) in the possession of someone who created or acquired it for the purposes of journalism, or

(b) in the possession of someone who received it from another person who intended the recipient to use it for the purposes of journalism.

Protection for personal records

99

(1) An information notice may not require a person to provide or produce personal records or information contained in personal records.

(2) But an information notice may require a person—

(a) to produce a document (or a copy of a document) that is a personal record, omitting the information which (either alone or with other information) makes the document a personal record;

(b) to provide information contained in a document which is a personal record, other than the information which (either alone or with other information) makes the document a personal record.

(3) “Personal records” means documentary and other records concerning an individual (“P”) (whether living or dead) who can be identified from those records and relating to—

(a) P's physical or mental health,

(b) spiritual counselling or assistance given or to be given to P, or

(i) by reason of an office or occupation has responsibilities for P's personal welfare, or

(ii) by reason of an order of a court has responsibilities for P's supervision.

Taxpayer notices following a tax return

100

(1) Where a person has made a tax return for a tax period, a taxpayer notice may not be issued for the purpose of checking that person's tax position for that period.

(2) Where a person has made a tax return in relation to a transaction, a taxpayer notice may not be issued for the purpose of checking a person's tax position in relation to that transaction.

(3) Subsections (1) and (2) do not apply where (or to the extent that) either condition 1 or 2 is met.

(4) Condition 1 is that a notice of enquiry has been issued in respect of—

(a) the tax return, or

(b) a claim (or an amendment of a claim) made by the person in relation to the tax period or the transaction to which the return relates,

and the enquiry has not been completed.

(5) Condition 2 is that, as regards the person, WRA has reason to suspect that—

(a) an amount that ought to have been assessed to a WRA-collected tax for the tax period or in relation to the transaction may not have been assessed,

(b) an assessment to a WRA-collected tax for the tax period or in relation to the transaction may be or have become insufficient, ...

(c) relief from a WRA-collected tax given or claimed for the tax period or in relation to the transaction may be or have become excessive,

(d) an amount of tax credit to which the person is not entitled may have been claimed, or

(e) a claim for tax credit may be or have become excessive.

(6) Where any partner in a partnership has made a tax return, this section has effect as if that return had been made by each of the partners.

(7) References in this section to a person who has made a tax return refer only to that person in the capacity in which the return was made.

Protection for privileged communications between legal advisers and clients

101

(1) An information notice may not require a person—

(a) to provide privileged information, or

(b) to produce any part of a document that is privileged.

(2) Information or a document is privileged if a claim for legal professional privilege could be maintained in respect of it in legal proceedings.

(3) The Welsh Ministers may by regulations make provision for the resolution by the tribunal of any dispute as to whether any information or document is privileged.

(4) The regulations may, in particular, make provision for the custody of a document while its status is being determined.

Protection for tax advisers and auditors

102

(1) An information notice may not require a tax adviser—

(a) to provide information about a relevant communication, or

(b) to produce any part of a document which is the tax adviser's property and consists of a relevant communication.

(2) In subsection (1)—

“relevant communication” (“gohebiaeth berthnasol”) means a communication between—a tax adviser and a person in relation to whose tax affairs the tax adviser has been appointed, orthe tax adviser of a person and any other tax adviser of that person,the purpose of which is the giving or obtaining of advice about the person's tax affairs;

“tax adviser” (“cynghorwr treth”) means a person appointed to give advice about the tax affairs of another person (whether appointed directly by that person or by another tax adviser of that person).

(3) An information notice may not require a person who has been appointed as an auditor for the purpose of an enactment—

(a) to provide information held in connection with the performance of the person's functions under that enactment, or

(b) to produce a document which is that person's property and which was created by that person or on that person's behalf for or in connection with the performance of those functions.

(4) Subsections (1) and (3) do not have effect in relation to—

(a) information explaining any information or document which the person to whom the notice is issued has, as tax accountant, assisted any client in preparing for, or delivering to, WRA, or

(b) a document which contains such information.

(5) In the case of an unidentified third party notice, subsections (1) and (3) do not have effect in relation to—

(a) information giving the identity or address of a person to whom the notice relates or of a person who has acted on behalf of such a person, or

(b) a document which contains such information.

(6) Subsections (1) and (3) have effect despite subsections (4) and (5) if the information in question has already been provided, or a document containing the information has already been produced, to WRA.

(7) Where subsection (1) or (3) does not have effect in relation to a document by virtue of subsection (4) or (5), an information notice that requires the document to be produced has effect as if it requires that part or those parts of the document containing the information mentioned in subsection (4) or (5) to be produced.

(8) In subsection (3), “enactment” also includes an enactment (whenever enacted or made) which is, or is contained in—

(a) an Act of the Scottish Parliament,

(b) Northern Ireland legislation (within the meaning of the Interpretation Act 1978 (c. 30)),

(c) a Scottish instrument (within the meaning of the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10)), or

(d) a statutory instrument (within the meaning of the Interpretation Act (Northern Ireland) 1954 (c. 33)).

CHAPTER 4 — INSPECTIONS OF PREMISES AND OTHER PROPERTY

Power to inspect business premises

103

(1) If WRA has grounds for believing that the inspection of a person's business premises is required for the purpose of checking the person's tax position, WRA may enter the premises and inspect—

(a) the premises;

(b) business assets that are on the premises;

(2) But WRA may carry out such an inspection only with—

(a) the agreement of the occupier of the premises, or

(b) the approval of the tribunal.

(3) An inspection may be carried out—

(a) at a time agreed to by the occupier of the premises, or

(b) if the inspection has been approved by the tribunal—

(i) at a reasonable time specified in a notice issued to the occupier at least 7 days before that time, or

(ii) at any reasonable time if the tribunal, when approving the inspection, is satisfied that WRA has grounds for believing that notifying the occupier would seriously prejudice the assessment or collection of WRA-collected tax.

(4) If WRA seeks to carry out an inspection without—

(a) the agreement of the occupier, or

(b) issuing a notice under subsection (3)(b)(i),

WRA must provide a notice at the time the inspection is to begin.

(5) A notice provided under subsection (4) must—

(a) if the occupier of the premises is present, be provided to the occupier;

(b) if the occupier is not present but there is a person present who appears to WRA to be in charge of the premises, be provided to that person;

(6) A notice issued under subsection (3)(b)(i), or provided under subsection (4), must state—

(a) that the inspection has been approved by the tribunal, and

(b) the possible consequences of obstructing a person exercising WRA's functions.

(7) The powers under this section do not include power to enter or inspect any part of the premises that is used solely as a dwelling.

(8) An inspection of premises is not to be carried out under this section if WRA has the power to carry out the inspection under section 103B.

Carrying out inspections under section 103: further provision

104

(1) When carrying out an inspection under section 103, 103A or 103B, WRA has the following powers.

(2) On entering the ... premises, WRA may—

(a) if it has grounds for believing that the carrying out of the inspection may be seriously obstructed, be accompanied by a constable, and

(b) be accompanied by a person authorised by WRA.

(3) WRA may make such examination or investigation as it considers to be necessary in the circumstances.

(4) WRA may direct that the premises or any part of them, or anything in them, be left undisturbed (either generally or in particular respects) for so long as is necessary for the purposes of any such examination or investigation.

(5) WRA, or a person accompanying WRA, may take samples of material from the premises.

(6) The power to take samples includes power—

(a) to carry out experimental borings or other works on the premises, and

(b) to install, keep or maintain monitoring and other apparatus on the premises.

(7) Any sample taken under subsection (5) is to be disposed of in such manner as WRA may determine.

Carrying out inspections under section 103: use of equipment and materials

105

(1) WRA, or a person accompanying WRA, may take any equipment or materials required for the purpose of an inspection under section 103, 103A or 103B onto the premises being inspected.

(2) WRA, or a person accompanying WRA, may take equipment or materials onto the premises—

(a) at a time agreed to by the occupier of the premises, or

(b) at any reasonable time, if either—

(i) a notice was issued under section 103(3)(b)(i) and the notice specified that the equipment or materials were to be taken onto the premises, or

(ii) WRA has grounds for believing that issuing such a notice would seriously prejudice the assessment or collection of WRA-collected tax.

(3) If equipment or materials are taken onto premises without—

(a) the agreement of the occupier, or

(b) a notice having been issued in accordance with subsection (2)(b)(i),

WRA must provide a notice at the time the equipment or materials are to be taken onto the premises.

(4) The notice must—

(a) if the occupier of the premises is present, be provided to the occupier;

(b) if the occupier is not present but there is a person present who appears to WRA to be in charge of the premises, be provided to that person;

(5) The notice must state the possible consequences of obstructing a person exercising WRA's functions.

(6) If the inspection, or the use of equipment or materials, has been approved by the tribunal, the notice must state that fact.

(7) References in this section to a notice issued under section 103(3)(b)(i) include a notice issued under that provision as applied by sections 103A(4) and 103B(5).

Power to inspect premises or property for valuation etc.

106

(1) WRA may enter premises and inspect the premises and any property on the premises for the purpose of valuing, measuring or determining the character of the premises or property if—

(a) the valuation, measurement or determination is required for the purposes of checking any person's tax position, and

(b) either condition 1 or 2 is met.

(2) Condition 1 is that—

(a) the inspection is carried out at a time agreed to by a relevant person, and

(b) a notice of the agreed time of the inspection has been issued to the relevant person.

(3) Condition 2 is that—

(a) the inspection has been approved by the tribunal, and

(b) a notice of the time of the inspection has been issued to a relevant person specified by the tribunal at least 7 days before that time.

(4) In this section, “relevant person” means—

(a) the occupier of the premises, or

(b) if the occupier cannot be identified or the premises are vacant, a person who controls the premises.

(5) A notice under subsection (2)(b) or (3)(b) must state possible consequences of obstructing a person exercising WRA's functions.

(6) A notice under subsection (3)(b) must also state that the inspection has been approved by the tribunal.

(7) If WRA considers it necessary to assist with the inspection, WRA may be accompanied by a person authorised by WRA.

Producing authorisation to carry out inspections

107

If a person carrying out an inspection under section 103 , 103A, 103B or 106 is unable to produce evidence of authority to carry out the inspection when asked to do so by—

(a) the occupier of the premises, or

(b) any other person who appears to be in charge of, or to control, the premises,

the inspection must stop and may not be continued until such evidence is produced.

Approval of tribunal for inspection of premises

108

(1) WRA may ask the tribunal to approve—

(a) an inspection under section 103 , 103A, 103B or 106, or

(b) the exercise of powers under section 104 or 105 in relation to an inspection under section 103 , 103A or 103B which has been agreed to by the occupier of the premises.

(2) The tribunal's approval of an inspection under section 103 , 103A or 103B includes approval of the exercise of the powers under section 104 or 105 subject to any conditions imposed by the tribunal in approving the inspection.

(3) An application for approval may be made under subsection (1) without notice of the application being sent to—

(a) the person whose tax position is the subject of the proposed inspection, or

(b) the occupier of the premises.

(4) The tribunal may approve an inspection under section 103, 103A or 103B only if—

(a) it is satisfied that the applicable requirement is met, and

(b) if the application for approval was made without notice, it is satisfied that sending notice of the application might have prejudiced the assessment or collection of WRA-collected tax.

(4A) The applicable requirement is—

(a) in the case of an inspection of a person's business premises under section 103, that WRA has grounds for believing that the inspection of the premises is required for the purpose of checking the person's tax position;

(b) in the case of an inspection of a person's business premises under section 103A, that WRA has grounds for believing that the conditions set out in subsections (2) and (3) of that section are met;

(c) in the case of an inspection of premises under section 103B, that WRA has grounds for believing the matters set out in subsection (1) of that section.

(5) The tribunal may approve an inspection under section 106 only if it is satisfied that the inspection is required for the purposes of checking any person's tax position and—

(a) if the application for approval was made without notice, it is satisfied that sending notice of the application might have prejudiced the assessment or collection of WRA-collected tax, or

(b) in any other case—

(i) the person whose tax position is the subject of the proposed inspection has been given a reasonable opportunity to make representations to WRA about the inspection,

(ii) the occupier of the premises has been given a reasonable opportunity to make such representations, and

(iii) the tribunal has been provided with a summary of any representations made.

(6) Subsection (5)(b)(ii) does not apply if the tribunal is satisfied that the occupier of the premises cannot be identified.

(7) Where the tribunal has approved an inspection under subsection (1)(a) or the exercise of a power under subsection (1)(b), WRA must carry out the inspection or exercise the power⁠—

(a) no later than 3 months after the day on which the tribunal's approval was given, or

(b) within such shorter period as the tribunal may specify when giving the approval.

Power to mark assets and to record information

109

The powers under sections 103 to 106 include—

(a) power to mark business assets, and anything containing business assets, for the purpose of indicating that they have been inspected, and

(b) power to obtain and record information (whether electronically or otherwise) relating to the premises, property, assets and documents that have been inspected.

Restriction on inspection of documents

110

WRA may not inspect a document under this Chapter if (or to the extent that), by virtue of Chapters 2 and 3, an information notice issued at the time of the inspection to the occupier of the premises could not require the occupier to produce the document.

Interpretation of Chapter 4

111

(1) In this Chapter—

“business assets” (“asedau busnes”) means assets that WRA has reason to believe are owned, leased or used in connection with the carrying on of a business by any person, but does not include documents;

“business documents” (“dogfennau busnes”) means documents (or copies of documents) that relate to the carrying on of a business by any person;

“business premises” (“mangre busnes”), in relation to a person, means premises (or any part of premises) that WRA has reason to believe are (or is) used in connection with the carrying on of a business by or on behalf of the person;

“premises” (“mangre”) includes any building or structure, any land and any means of transport.

(2) For the purposes of the definition of “premises” in subsection (1) as it applies in relation to landfill disposals tax, “land” includes material (within the meaning of LDTA) that WRA has grounds for believing has been deposited on the surface of land or on a structure set into the surface, or under the surface of land.

CHAPTER 5 — FURTHER INVESTIGATORY POWERS

Power to copy and remove documents

112

(1) Where a document is inspected by WRA or is produced by a person, WRA may take copies of the document or make extracts from it.

(2) Where a document is inspected by WRA or is produced by a person, WRA may—

(a) remove the document at a reasonable time, and

(b) retain the document for a reasonable period,

if it appears to WRA to be necessary to do so.

(3) Where WRA removes a document, WRA must supply free of charge—

(a) a receipt for the document, and

(b) a copy of the document,

if requested to do so by the person who was in possession or power of the document when it was produced or inspected.

(4) The removal of a document under subsection (2)(a) is not to be regarded as breaking any lien claimed on the document.

(5) Where a document removed under subsection (2)(a) is lost or damaged before it is returned, WRA is liable to compensate the owner of the document for any expenses reasonably incurred in replacing or repairing the document.

(6) In this section, references to a document include a copy of the document.

Further provision about records

113

(1) This section applies to any provision of this Act that—

(a) requires a person to produce a document,

(b) permits WRA—

(i) to inspect a document,

(ii) to make or take copies of or extracts from a document, or

(iii) to remove a document,

(c) makes provision about penalties or offences in connection with the production or inspection of documents, including in connection with the failure to produce or permit the inspection of documents, or

(d) makes any other provision in connection with the requirement mentioned in paragraph (a) or the powers mentioned in paragraph (b).

(2) A provision to which this section applies has effect as if—

(a) any reference in the provision to a document were a reference to anything in which information of any description is recorded, and

(b) any reference in the provision to a copy of a document were a reference to anything onto which information recorded in the document has been copied, by whatever means and whether directly or indirectly.

(3) WRA may, at any reasonable time, obtain access to, inspect and check the operation of any computer and any associated apparatus or material which is or has been used in connection with a relevant document.

(4) In subsection (3), “relevant document” means a document—

(a) that a person has been, or may be, required to produce by or under a provision of this Act, or

(b) that WRA may—

(i) inspect,

(ii) make or take copies of or extracts from, or

(iii) remove.

(5) WRA may require any assistance that it reasonably requires for the purposes of subsection (3) from—

(a) the person by whom or on whose behalf the computer is or has been used, or

(b) any person having charge of, or otherwise concerned with the operation of, the computer, apparatus or material.

(6) If a person exercising the power under subsection (3) is unable to produce evidence of authority to do so when asked to provide such evidence by—

(a) the person by whom or on whose behalf the computer is or has been used, or

(b) any person having charge of, or otherwise concerned with the operation of, the computer, apparatus or material,

the person exercising the power must stop and may not continue until such evidence is produced.

CHAPTER 6 — OFFENCES RELATING TO INFORMATION NOTICES

Offence of concealing etc. documents following information notice

114

(1) A person commits an offence if—

(a) WRA issues an information notice to the person—

(i) which requires the person to produce a document, and

(ii) which has been approved by the tribunal, and

(b) the person conceals, destroys or otherwise disposes of (or arranges for the concealment, destruction or disposal of) that document.

(2) A person may commit an offence under subsection (1) despite the fact that the person has appealed against the information notice or against a requirement in it.

(3) A person does not commit an offence under subsection (1) if the person acts after the original document has been produced in accordance with the information notice, unless WRA has notified the person that the document must continue to be available for inspection (and has not withdrawn the notification).

(4) A person does not commit an offence under subsection (1) where a copy of a document has been produced in accordance with section 96(1), if the person acts after the end of the period of 6 months beginning with the day on which the copy was produced unless, before the end of that period, WRA has made a request for the original document under section 96(3).

(5) It is a defence for a person charged with an offence under subsection (1) to show that the person had a reasonable excuse for concealing, destroying or otherwise disposing of (or for arranging for the concealment, destruction or disposal of) the document.

(6) A person who commits an offence under subsection (1) is liable—

(a) on summary conviction, to a fine;

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine (or both).

Offence of concealing etc. documents following notification

115

(1) A person commits an offence if the person conceals, destroys or otherwise disposes of (or arranges for the concealment, destruction or disposal of) a document after WRA has told the person that—

(a) a document is to be, or is likely to be, the subject of an information notice addressed to that person (see section 88(3)(b)), and

(b) WRA intends to seek the approval of the tribunal for the issuing of the information notice (see section 87(2)(b)) or is required to seek such approval (see sections 86, 89(1)(d) and 92(1)).

(2) A person does not commit an offence under subsection (1) if the person conceals, destroys or otherwise disposes of the document after—

(a) the end of the period of 6 months beginning with the day on which WRA told the person (or last told the person), or

(b) an information notice has been issued requiring the person to produce the document.

(3) It is a defence for a person charged with an offence under subsection (1) to show that the person had a reasonable excuse for concealing, destroying or otherwise disposing of (or for arranging for the concealment, destruction or disposal of) the document.

(4) A person who commits an offence under subsection (1) is liable—

(a) on summary conviction, to a fine;

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine (or both).

CHAPTER 7 — TRIBUNAL APPROVALS

No review or appeal of tribunal approvals

116

(1) In section 11(5) of TCEA (decisions excluded from right to appeal to Upper Tribunal), after paragraph (c) insert—

(ca) any decision of the First-tier Tribunal under section 88, 89(3) or 92(3) of the Tax Collection and Management (Wales) Act 2016 (anaw 6) (approval for Welsh Revenue Authority to issue certain information notices), (cb) any decision of the First-tier Tribunal under section 108 of that Act (approval for Welsh Revenue Authority to inspect premises),

(2) In section 13(8) of that Act (decisions excluded from right to appeal to Court of Appeal etc.), after paragraph (b) insert—

(ba) any decision of the Upper Tribunal under section 88, 89(3) or 92(3) of the Tax Collection and Management (Wales) Act 2016 (anaw 6) (approval for Welsh Revenue Authority to issue certain information notices), (bb) any decision of the Upper Tribunal under section 108 of that Act (approval for Welsh Revenue Authority to inspect premises),

PART 5 — PENALTIES

CHAPTER 1 — OVERVIEW

Overview of Part

117

(1) This Part makes provision about penalties relating to WRA-collected taxes, including—

(a) penalties relating to failures to make tax returns or to pay WRA-collected tax or amounts payable in respect of tax credits,

(b) penalties relating to inaccuracies,

(d) penalties relating to investigations.

(2) It includes provision about—

(a) the circumstances which liability to those penalties arises,

(b) the amounts of those penalties,

(c) the circumstances in which liability to those penalties may be suspended or the amounts of those penalties may be reduced,

(d) the assessment of those penalties, and

(e) the payment of those penalties.

CHAPTER 2 — PENALTIES FOR FAILURE TO MAKE RETURNS OR PAY TAX OR AMOUNTS PAYABLE IN RESPECT OF TAX CREDITS

Penalty for failure to make devolved tax return

Penalty for failure to make tax return on or before filing date

118

(1) A person who is required to make a devolved tax return is liable to a penalty of £100 if the person fails to make a devolved tax return on or before the filing date.

(2) But see section 118A for an exception to the rule above.

Penalty for failure to make tax return within 6 months from filing date

119

(1) A person who is required to make a devolved tax return is liable to a penalty if the person's failure to make a devolved tax return continues after the end of the period of 6 months beginning with the day after the filing date.

(2) The penalty is the greater of—

(a) 5% of the amount of the devolved tax to which the person would have been liable if the tax return had been made, and

(b) £300.

Penalty for failure to make tax return within 12 months from filing date

120

(1) A person who is required to make a devolved tax return is liable to a penalty if the person's failure to make a devolved tax return continues after the end of the period of 12 months beginning with the day after the filing date.

(2) Where, by failing to make the devolved tax return, the person deliberately withholds information which would enable or assist WRA to assess the person's liability to a devolved tax, the penalty is —

(a) £300, or

(b) a greater amount, not exceeding 95% of the amount of devolved tax to which the person would have been liable if the tax return had been made.

(3) In any case not falling within subsection (2), the penalty is the greater of—

(a) 5% of the amount of the devolved tax to which the person would have been liable if the tax return had been made, and

(b) £300.

Reduction in penalty for failure to make tax return: disclosure

121

(1) WRA may reduce a penalty under section 118, 118A, 119 , 120, 120B, 120E or 120F if the person discloses information which has been withheld as a result of a failure to make a tax return (“relevant information”).

(2) A person discloses relevant information by—

(a) telling WRA about it,

(b) giving WRA reasonable help in quantifying any WRA-collected tax unpaid by reason of the information having been withheld, and

(3) In reducing a penalty under this section, WRA may take account of—

(a) whether the disclosure was prompted or unprompted, and

(b) the quality of the disclosure.

(4) Disclosure of relevant information—

(a) is “unprompted” if made at a time when the person making the disclosure has no reason to believe that WRA has discovered or is about to discover the relevant information, and

(b) otherwise, is “prompted”.

(5) “Quality”, in relation to disclosure, includes timing, nature and extent.

Penalty for failure to pay tax

122

(1) A person is liable to a penalty if the person has failed to pay an amount of WRA-collected tax on or before the penalty date in respect of that amount.

(2) The penalty—

(a) in respect of an amount of land transaction tax, is 5% of the amount of unpaid tax;

(b) in respect of an amount of landfill disposals tax, is 1% of the amount of unpaid tax;

(i) if 5% of the amount of unpaid levy is lower than £100, the penalty is £100;

(ii) if 5% of the amount of unpaid levy is greater than £5000, the penalty is £5000.

(2A) But see section 122ZA for an exception to the rule in subsection (1).

(3) In this section and in sections 122ZA, 122A and 122B, the penalty date in respect of an amount of WRA-collected tax specified in column 3 of Table A1 is the date specified in column 4.

Item	WRA-collected Tax	Amount of Tax	Penalty date
1	Land transaction tax	Amount (or additional amount) payable as a result of a tax return made by the buyer in a land transaction (unless the amount falls within item 8 or 9).	The date falling 30 days after the filing date for the return.
2	Landfill disposals tax	Amount payable as a result of a tax return.	The date falling 30 days after the filing date for the return.
2A	Visitor levy	Amount payable as a result of a visitor levy return.	The date falling 30 days after the filing date for the visitor levy return.
3	Any WRA-collected tax	Amount payable as a result of a WRA determination made in place of a tax return.	The date falling 30 days after the date by which WRA believes the tax return was required to be made.
4	Any WRA-collected tax	Amount payable as a result of a WRA assessment made in place of a tax return (unless the amount falls within item 7).	The date falling 30 days after the date by which WRA believes the tax return was required to be made.
5	Any WRA-collected tax	Amount (or additional amount) payable as a result of a WRA assessment made where a tax return has been made.	The date falling 30 days after the date by which the amount (or additional amount) is required to be paid.
6	Any WRA-collected tax	Amount (or additional amount) payable as a result of an amendment or a correction to a tax return.	The date falling 30 days after the date by which the amount (or additional amount) is required to be paid.
7	Any devolved tax	Amount (or additional amount) payable as a result of a WRA assessment made for the purposes of making an adjustment to counteract a tax advantage (see Part 3A) in a case where a tax return which WRA has reason to believe was required to be made has not in fact been made.	The date falling 30 days after the date by which the amount (or additional amount) is required to be paid.
8	Land transaction tax	Where a deferral request is made under section 58 of LTTA, a deferred amount required to be paid by virtue of section 61(1)of that Act.	The date falling 30 days after the date by which the deferred amount is required to be paid.
9	Land transaction tax	Where a deferral request is made under section 58 of LTTA, a refused amount within the meaning of section 61(2)(a) of that Act.	The date falling 30 days after the date by which the refused amount is required to be paid.
10	Landfill disposals tax	Amount charged by a charging notice issued under section 49 or 50 of LDTA.	The date falling 30 days after the date by which the amount is required to be paid.
11	Any WRA-collected tax	A postponed amount within the meaning of section 181G(2).	The date falling 30 days after the date on which the postponement period ends (see section 181G as to the calculation of postponement periods).

(4) In this section, “"deferred amount”” has the same meaning as in section 58(6)(a) of LTTA.

(5) The Welsh Ministers may by regulations modify Table A1.

Suspension of penalty for failure to pay tax during currency of agreement for deferred payment

123

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Penalties under Chapter 2: general

Interaction of penalties

124

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special reduction in penalty under Chapter 2

125

(1) WRA may reduce a penalty under this Chapter if it thinks it right to do so because of special circumstances.

(2) In subsection (1), “special circumstances” does not include—

(a) ability to pay, or

(b) the fact that a potential loss of revenue from one person is balanced by a potential over-payment by another.

(2A) But “"special circumstances”” may include the fact that WRA has agreed that a person may pay an amount of WRA-collected tax in instalments over an agreed period.

(3) In subsection (1), the reference to reducing a penalty includes a reference to—

(a) remitting a penalty entirely,

(b) suspending a penalty, and

(4) In this section a reference to a penalty include a reference to any interest in relation to a penalty.

Reasonable excuse for failure to make tax return or pay tax

126

(1) If a person satisfies WRA or (on appeal) the tribunal that there is a reasonable excuse for a failure to make a tax return, the person is not liable to a penalty under sections 118 to 120 , 120B, 120E or 120F, or (as the case may be) to a penalty point under section 120A, in relation to the failure.

(2) If a person satisfies WRA or (on appeal) the tribunal that there is a reasonable excuse for a failure to pay a WRA-collected tax, the person is not liable to a penalty under sections 122 to 122B in relation to the failure.

(2A) If a person satisfies WRA or (on appeal) the tribunal that there is a reasonable excuse for a failure to pay an amount payable in respect of a tax credit, the person is not liable to a penalty under section 123A in relation to the failure.

(3) For the purposes of subsections (1) , (2) and (2A)—

(a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside the person's control;

(b) where a person relies on another person to do anything, that is not a reasonable excuse unless the first person took reasonable care to avoid the failure;

(c) where a person had a reasonable excuse for the failure but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Assessment of penalties under Chapter 2

127

(1) Where a person becomes liable to a penalty under this Chapter, WRA must—

(a) assess the penalty,

(b) issue notice to the person of the penalty assessed, and

(2) An assessment of a penalty under this Chapter may be combined with an assessment to a WRA-collected tax.

(3) A supplementary assessment may be made in respect of a penalty under section 119 , 120 or 120F if an earlier assessment operated by reference to an underestimate of the amount of WRA-collected tax to which a person would have been liable if a tax return had been made.

(4) If—

(a) an assessment in respect of a penalty under section 119 , 120 or 120F is based on the amount of WRA-collected tax to which a person would have been liable if a tax return had been made, and

(b) that liability is found by WRA to be excessive,

WRA may issue a notice to the person liable to the penalty amending the assessment so that it is based on the correct amount.

(5) A supplementary assessment may be made in respect of a penalty under section 122 , 122ZA, 122A or 122B if an earlier assessment operated by reference to an underestimate of the amount of WRA-collected tax which was payable.

(6) If an assessment in respect of a penalty under section 122 , 122ZA, 122A or 122B is based on an amount of tax payable that is found by WRA to be excessive, WRA may issue a notice to the person liable to the penalty amending the assessment so that it is based on the correct amount.

(6A) A supplementary assessment may be made in respect of a penalty under section 123A if an earlier assessment operated by reference to an underestimate of the amount payable in respect of the tax credit in question.

(6B) If an assessment in respect of a penalty under section 123A is based on an amount that is found by WRA to be excessive, WRA may issue a notice to the person liable to the penalty amending the assessment so that it is based on the correct amount.

(7) An amendment made under subsection (4) , (6) or (6B) —

(a) does not affect when the penalty must be paid, and

(b) may be made after the last day on which the assessment in question could have been made under section 128.

Time limit for assessment of penalties under Chapter 2

128

(1) An assessment of a penalty under this Chapter ... must be made on or before the later of date A and (where it applies) date B.

(2) Date A is the last day of the period of 2 years beginning with—

(a) in the case of failure to make a tax return , other than where liability to the penalty arises under section 120B, the filing date, ...

(aa) in the case of liability to a penalty under section 120B (financial penalty where penalty points have been awarded), the filing date of the return in relation to which the penalty point that caused the visitor accommodation provider to reach the penalty threshold was awarded,

(b) in the case of failure to pay a WRA-collected tax, the penalty date , or

(3) Date B is the last day of the period of 12 months beginning with—

(a) in the case of a failure to make a tax return—

(i) the end of the appeal period for the assessment of the amount of WRA-collected tax to which a person would have been liable if the tax return had been made, or

(ii) if there is no such assessment, the date on which that liability is ascertained or it is ascertained that the liability is nil;

(b) in the case of a failure to pay a WRA-collected tax—

(i) the end of the appeal period for the assessment of the amount of WRA-collected tax in respect of which the penalty is assessed, or

(ii) if there is no such assessment, the date on which that amount of WRA-collected tax is ascertained.

(c) in the case of a failure to pay an amount payable in respect of a tax credit, the end of the appeal period for the assessment of the amount in respect of which the penalty is assessed.

(4) In subsection (2)(b), “penalty date” has the meaning given by section 122(3).

(4A) In subsection (2)(c), “penalty date” has the meaning given by section 123A(3).

(5) In subsection (3) ..., “appeal period” means ...—

(a) if no appeal is made, the period during which an appeal could be made, and

(b) if an appeal is made, the period ending with its final determination or withdrawal.

CHAPTER 3 — PENALTIES FOR INACCURACIES

Penalties for inaccuracies in documents

Penalty for inaccuracy in document given to WRA

129

(1) A person is liable to a penalty where—

(a) the person gives WRA a document, and

(b) conditions 1 and 2 are satisfied.

(2) Condition 1 is that the document contains an inaccuracy which amounts to, or leads to—

(a) an understatement of a liability to a WRA-collected tax,

(b) a false or inflated statement of a loss relating to a WRA-collected tax, ...

(d) a false or inflated claim for a tax credit.

(3) Condition 2 is that the inaccuracy was deliberate or careless on the person's part.

(4) An inaccuracy is careless on a person's part if it is due to the person's failure to take reasonable care.

(5) An inaccuracy which was neither deliberate nor careless on a person's part when the document was given is to be treated as careless if the person—

(a) discovered the inaccuracy at some later time, and

(b) did not take reasonable steps to inform WRA.

(6) Where a document contains more than one inaccuracy in respect of which conditions 1 and 2 are satisfied, the person is liable to a penalty for each such inaccuracy.

Amount of penalty for inaccuracy in document given to WRA

130

(1) The penalty for a deliberate inaccuracy is an amount not exceeding 100% of the potential lost revenue.

(2) The penalty for a careless inaccuracy is an amount not exceeding 30% of the potential lost revenue.

Suspension of penalty for careless inaccuracy

131

(1) WRA may suspend all or part of a penalty for a careless inaccuracy under section 129 by issuing a notice to the person liable to the penalty.

(2) The notice must specify—

(a) what part of the penalty is to be suspended,

(b) a period of suspension not exceeding 2 years, and

(3) WRA may suspend all or part of a penalty only if compliance with a condition of suspension would help the person to avoid becoming liable to further penalties under section 129 for careless inaccuracy.

(4) A condition of suspension may specify—

(a) action to be taken, and

(b) a period within which it must be taken.

(5) At the end of the period of suspension—

(a) if the person satisfies WRA that the conditions of suspension have been complied with, the suspended penalty or part is cancelled, and

(b) otherwise, the suspended penalty or part becomes payable.

(6) If, during the period of suspension of all or part of a penalty payable under section 129, the person becomes liable to another penalty under that section, the suspended penalty or part becomes payable.

Penalty for deliberate inaccuracy in document given to WRA by another person

132

(1) A person (referred to in this section as “person A”) is liable to a penalty where—

(a) another person gives WRA a document,

(b) the document contains a relevant inaccuracy, and

(i) to person A deliberately supplying false information to the other person (whether directly or indirectly), or

(ii) to person A deliberately withholding information from the other person,

with the intention of the document containing the inaccuracy.

(2) A “relevant inaccuracy” is an inaccuracy which amounts to, or leads to—

(a) an understatement of a liability to a WRA-collected tax,

(b) a false or inflated statement of a loss relating to a WRA-collected tax, ...

(d) a false or inflated claim for a tax credit.

(3) Person A is liable to a penalty under this section in respect of an inaccuracy whether or not the other person is liable to a penalty under section 129 in respect of the same inaccuracy.

(4) The penalty payable under this section is an amount not exceeding 100% of the potential lost revenue.

Penalty for failure to notify under-assessment etc.

Penalty for failure to notify under-assessment or under-determination

133

(1) A person is liable to a penalty where—

(a) a WRA assessment understates the person's liability to a WRA-collected tax, and

(b) the person has failed to take reasonable steps to notify WRA, within the period of 30 days beginning with the day on which the notice of assessment is issued, that it is an under-assessment.

(1A) A person is also liable to a penalty where—

(a) a WRA assessment under section 55A understates the amount that the person is required to pay to WRA, and

(b) the person has failed to take reasonable steps to notify WRA, within the period of 30 days beginning with the day on which the notice of assessment is issued, that it is an under-assessment.

(2) In deciding what steps (if any) were reasonable, WRA must consider whether the person knew, or should have known, about the under-assessment.

(3) The penalty payable under this section is an amount not exceeding 30% of the potential lost revenue.

(4) In this section—

(a) “WRA assessment” includes a determination made by WRA under section 52, and

(b) accordingly, references in this Chapter to an under-assessment include references to an under-determination.

Potential lost revenue

Meaning of “potential lost revenue”

134

In this Chapter, “potential lost revenue” has the meaning given by sections 135 to 138.

Potential lost revenue: normal rule

135

(1) The “potential lost revenue” in respect of—

(a) an inaccuracy in a document (including an inaccuracy attributable to a supply of false information or withholding of information), or

(b) a failure to notify an under-assessment,

is the additional amount payable in respect of a WRA-collected tax or tax credit as a result of correcting the inaccuracy or under-assessment.

(2) The reference in subsection (1) to the additional amount payable includes a reference to—

(a) an amount payable to WRA having been erroneously paid by way of repayment of WRA-collected tax, ...

(b) an amount which would have been repayable by WRA had the inaccuracy or under-assessment not been corrected, and

(c) an amount which WRA would have been required to set off against a person’s liability to tax, or to pay to a person, had the inaccuracy or under-assessment not been corrected.

Potential lost revenue: multiple errors

136

(1) Where a person is liable to a penalty under section 129 in respect of more than one inaccuracy, and the calculation of potential lost revenue under section 135 in respect of each inaccuracy depends on the order in which they are corrected, careless inaccuracies are to be taken to be corrected before deliberate inaccuracies.

(2) In calculating potential lost revenue where a person is liable to a penalty under section 129 in respect of one or more understatements in one or more documents relating to a tax period , transaction or claim for tax credit, account must be taken of any overstatements in any document given by the person which relate to the same tax period , transaction or claim for tax credit.

(3) In subsection (2)—

(a) “understatement” means an inaccuracy that meets condition 1 in section 129, and

(b) “overstatement” means an inaccuracy that does not meet that condition.

(4) For the purposes of subsection (2) overstatements are to be set against understatements in the following order—

(a) understatements in respect of which the person is not liable to a penalty,

(b) careless understatements, and

(5) In calculating, for the purposes of a penalty under section 129, potential lost revenue in respect of a document given by or on behalf of a person, no account is to be taken of the fact that a potential loss of revenue from a person is or may be balanced by a potential overpayment by another person (except to the extent that an enactment requires a person's liability to a devolved tax to be adjusted by reference to another person's liability to a devolved tax).

Potential lost revenue: losses

137

(1) Where an inaccuracy has the result that a loss is wrongly recorded for the purposes of a WRA-collected tax and the loss has been wholly used to reduce the amount payable in respect of that tax, the potential lost revenue is calculated in accordance with section 135.

(2) Where an inaccuracy has the result that a loss is wrongly recorded for the purposes of a WRA-collected tax and the loss has not been wholly used to reduce the amount payable in respect of that tax, the potential lost revenue is—

(a) the potential lost revenue calculated in accordance with section 135 in respect of any part of the loss that has been used to reduce the amount payable in respect of that tax, plus

(b) 10% of any part that has not.

(3) Subsections (1) and (2) apply both—

(a) to a case where no loss would have been recorded but for the inaccuracy, and

(b) to a case where a loss of a different amount would have been recorded (but in that case subsections (1) and (2) apply only to the difference between the amount recorded and the true amount).

(4) The potential lost revenue in respect of a loss is nil where, because of the nature of the loss or the circumstances of the person chargeable to the WRA-collected tax, there is no reasonable prospect of the loss being used to support a claim to reduce any person's liability to that tax.

Potential lost revenue: delayed tax

138

(1) Where an inaccuracy resulted in an amount of WRA-collected tax being declared later than it should have been (“the delayed tax”), the potential lost revenue is—

(a) 5% of the delayed tax for each year of the delay;

(b) a percentage of the delayed tax, for each period of delay of less than a year, equating to 5% per year.

(2) This section does not apply to a case to which section 137 applies.

Penalties under Chapter 3: general

Reduction in penalty under Chapter 3 for disclosure

139

(1) WRA may reduce a penalty payable under this Chapter where a person makes a qualifying disclosure.

(2) A “qualifying disclosure” means disclosure of—

(a) an inaccuracy which is relevant to a person's liability to a WRA-collected tax,

(b) a supply of false information, or withholding of information, which is relevant to a person's liability to a WRA-collected tax, ...

(d) an inaccuracy which is relevant to a person’s entitlement to a tax credit or liability to pay an amount in respect of a tax credit,

(e) a supply of false information, or withholding of information, which is relevant to a person’s entitlement to a tax credit or liability to pay an amount in respect of a tax credit, or

(f) a failure to disclose an under-assessment in respect of a person’s liability to pay an amount in respect of a tax credit.

(3) A person makes a qualifying disclosure by—

(a) telling WRA about it,

(b) giving WRA reasonable help in quantifying—

(i) the inaccuracy,

(ii) the inaccuracy attributable to the supply of false information or withholding of information, or

(iii) the under-assessment, and

(i) the inaccuracy,

(ii) the inaccuracy attributable to the supply of false information or withholding of information, or

(iii) the under-assessment,

is fully corrected.

(4) In reducing a penalty under this section, WRA may take account of—

(a) whether the disclosure was prompted or unprompted, and

(b) the quality of the disclosure.

(5) Disclosure of relevant information—

(a) is “unprompted” if made at a time when the person making the disclosure has no reason to believe that WRA has discovered or is about to discover the inaccuracy, the supply of false information or withholding of information, or the under-assessment, and

(b) otherwise, is “prompted”.

(6) “Quality”, in relation to disclosure, includes timing, nature and extent.

Special reduction in penalty under Chapter 3

140

(1) WRA may reduce a penalty under this Chapter if it thinks it right to do so because of special circumstances.

(2) In subsection (1), “special circumstances” does not include—

(a) ability to pay, or

(b) the fact that a potential loss of revenue from one person is balanced by a potential over-payment by another.

(3) In subsection (1), the reference to reducing a penalty includes a reference to—

(a) remitting a penalty entirely,

(b) suspending a penalty, and

(4) In this section, references to a penalty include references to any interest in relation to a penalty.

Assessment of penalties under Chapter 3

141

(1) Where a person becomes liable to a penalty under this Chapter, WRA must—

(a) assess the penalty,

(b) issue a notice to the person of the penalty assessed, and

(c) state in the notice the period , transaction or claim for tax credit in relation to which the penalty has been assessed.

(2) An assessment of a penalty under this Chapter may be combined with an assessment to WRA-collected tax.

(3) An assessment of a penalty under section 129 or 132 must be made before the end of the period of 12 months beginning with—

(a) the end of the appeal period for the decision correcting the inaccuracy, or

(b) if there is no assessment to the tax concerned as a result of that decision, the day on which the inaccuracy is corrected.

(4) An assessment of a penalty under section 133 must be made before the end of the period of 12 months beginning with—

(a) the end of the appeal period for the assessment of tax which corrected the understatement, or

(b) if there is no assessment correcting the understatement, the day on which the understatement is corrected.

(5) In subsections (3) and (4), “appeal period” means ...—

(a) if no appeal is made, the period during which an appeal could be made, and

(b) if an appeal is made, the period ending with its final determination or withdrawal.

(6) Subject to subsections (3) and (4), a supplementary assessment may be made in respect of a penalty under this Chapter if an earlier assessment operated by reference to an underestimate of the potential lost revenue.

Interpretation

Interpretation of Chapter 3

142

In this Chapter—

(a) a reference to giving a document to WRA includes—

(i) a reference to communicating information to WRA in any form and by any method (whether by post, fax, email, telephone or otherwise), and

(ii) a reference to making a statement or declaration in a document;

(b) a reference to making a tax return or doing anything in relation to a tax return includes a reference to amending a tax return or doing anything in relation to an amended tax return;

(c) a reference to a loss includes a reference to a charge, expense, deficit and any other amount which may be available for, or relied on to claim, a deduction or relief;

(d) a reference to action includes a reference to omission.

CHAPTER 4 — PENALTIES RELATING TO RECORD-KEEPING AND REIMBURSEMENT ARRANGEMENTS

Penalty for failure to keep and preserve records in connection with tax returns or claims

Penalty for failure to keep and preserve records

143

(1) A person who fails to comply with section 38 , 38A or 69 is liable to a penalty not exceeding £3,000.

(2) But no penalty is incurred if WRA is satisfied that any facts that it reasonably requires to be proved, and which would have been proved by the records, are proved by other documentary evidence provided to it.

Reasonable excuse for failure to keep and preserve records

144

(1) If a person who fails to comply with section 38 , 38A or 69 satisfies WRA or (on appeal) the tribunal that there is a reasonable excuse for the failure, there is no liability to a penalty under section 143 in relation to the failure.

(2) For the purposes of subsection (1)—

(a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside the person's control;

(b) where the person relies on another person to do anything, that is not a reasonable excuse unless the first person took reasonable care to avoid the failure;

(c) where the person had a reasonable excuse for the failure but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Assessment of penalties under section 143

145

(1) Where a person becomes liable to a penalty under section 143, WRA must—

(a) assess the penalty, and

(b) issue notice to the person of the penalty assessed.

(2) An assessment of a penalty under section 143 must be made within the period of 12 months beginning with the day on which WRA first believed the person to have failed to comply with section 38 , 38A or 69.

CHAPTER 5 — PENALTIES RELATING TO INVESTIGATIONS

Penalties for failure to comply or obstruction

Penalty for failure to comply with information notice or obstruction

146

(1) This section applies to a person who—

(a) fails to comply with an information notice,

(b) deliberately obstructs WRA in the course of an inspection, or in the exercise of a power, that has been approved by the tribunal under section 108,

(d) fails to comply within a reasonable time with a requirement under section 113(5).

(2) The person is liable to a penalty of £300.

(3) The reference to a person who fails to comply with an information notice includes a person who conceals, destroys or otherwise disposes of (or arranges for the concealment, destruction or disposal of) a document in breach of section 114 or 115.

Daily default penalty for failure to comply with information notice or obstruction

147

(1) This section applies if the failure or obstruction mentioned in section 146(1) continues after the day on which a penalty notice is issued under section 153(1)(b) in respect of the failure or obstruction.

(2) But this section does not apply if—

(a) the failure is in respect of a debtor contact notice, or

(b) a decision relating to the penalty under section 146 in respect of the failure or obstruction is the subject of—

(i) a review for which notice of the conclusions has not yet been issued, or

(ii) an appeal which has not yet been finally determined or withdrawn.

(3) The person is liable to a further penalty or penalties not exceeding £60 for each day on which the failure or obstruction continues.

Effect of extension of time limit for compliance

148

Liability to a penalty under section 146 or 147 does not arise in respect of a failure by a person to do anything required to be done within a limited period of time if the person did it within such further time (if any) as WRA may have allowed.

Reasonable excuse for failure to comply or obstruction

149

(1) Liability to a penalty under section 146 or 147 does not arise if the person satisfies WRA or (on appeal) the tribunal that there is a reasonable excuse for the failure or the obstruction of WRA.

(2) For the purposes of this section—

(a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside the person's control;

(b) where the person relies on another person to do anything, that is not a reasonable excuse unless the first person took reasonable care to avoid the failure or obstruction;

(c) where the person had a reasonable excuse for the failure or obstruction but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied, or the obstruction stops, without unreasonable delay after the excuse ceased.

Further penalties for continuing failure to comply or obstruction

Increased daily default penalty for failure to comply with information notice

150

(1) This section applies if—

(a) a penalty under section 147 is assessed under section 153 in respect of a person's failure to comply with an unidentified third party notice,

(b) the failure continues for more than 30 days beginning with the day on which notice of the penalty was issued, and

(c) the person has been told that an application may be made under this section for an increased daily penalty to be imposed.

(2) WRA may make an application to the tribunal for an increased daily penalty to be imposed on the person.

(3) But WRA may not make such an application if a decision relating to a penalty under section 146 or 147 in respect of the failure is the subject of—

(a) a review for which notice of the conclusions has not yet been issued, or

(b) an appeal which has not yet been finally determined or withdrawn.

(4) If the tribunal decides that an increased daily penalty should be imposed, then for each applicable day on which the failure continues—

(a) the person is not liable to a penalty under section 147 for the failure, and

(b) the person is liable instead to a penalty under this section of an amount determined by the tribunal.

(5) The tribunal may not determine an amount exceeding £1,000 for each applicable day.

(6) In determining the amount the tribunal must have regard to—

(a) the likely cost to the person of complying with the notice,

(b) any benefits to the person of not complying with it, and

(7) If a person becomes liable to a penalty under this section, WRA must issue to the person notice of that fact.

(8) The notice must state the first day on which the increased penalty is to apply.

(9) That day and any subsequent day on which the failure continues is an “applicable day” for the purposes of this section and section 153(4).

151

(1) This section applies where—

(a) a person becomes liable to a penalty under section 146,

(b) the failure or obstruction continues after the day on which a penalty notice is issued under section 153(1)(b) in respect of the penalty,

(i) the amount of WRA-collected tax that the person has paid, or is likely to pay, or

(ii) the amount that the person has paid, or is likely to pay in respect of a tax credit,

is significantly less than it would otherwise have been,

(d) before the end of the period of 12 months beginning with the relevant date, WRA makes an application to the Upper Tribunal for an additional penalty to be imposed on the person (see subsection (6)) and gives notice of the application to the person, and

(e) the Upper Tribunal decides that it is appropriate for an additional penalty to be imposed.

(2) The person is liable to a penalty of an amount determined by the Upper Tribunal.

(3) In determining the amount, the Upper Tribunal must have regard to

(i) the amount of WRA-collected tax or

(ii) the amount in respect of a tax credit,

which has not been, or is not likely to be, paid by the person.

(4) Any penalty under this section is in addition to the penalty or penalties under section 146 or 147.

(5) In subsection (1)(d), the “relevant date” means—

(a) in a case involving an information notice against which a person may appeal, the latest of—

(i) the day on which the person became liable to the penalty under section 146,

(ii) if no appeal against the information notice is made, the end of the period in which such an appeal could have been made, and

(iii) if such an appeal is made, the day on which the appeal is finally determined or withdrawn, and

(b) in any other case, the day on which the person became liable to the penalty under section 146.

(6) WRA may not make an application of the kind mentioned in subsection (1)(d) if a decision relating to a penalty under section 146, 147 or 150 in respect of the failure or obstruction is the subject of—

(a) a review for which notice of the conclusions has not yet been issued, or

(b) an appeal which has not yet been finally determined or withdrawn.

Penalty for inaccurate information or documents

152

(1) This section applies if—

(a) a person provides inaccurate information, or produces a document that contains an inaccuracy, in complying with an information notice other than a debtor contact notice, and

(b) condition 1, 2 or 3 is met.

(2) Condition 1 is that the inaccuracy is—

(a) deliberate, or

(b) due to a failure by the person to take reasonable care.

(3) Condition 2 is that the person knows of the inaccuracy at the time the information is provided or the document is produced but does not inform WRA at that time.

(4) Condition 3 is that the person—

(a) discovers the inaccuracy some time later, and

(b) fails to take reasonable steps to inform WRA.

(5) The person is liable to a penalty not exceeding £3,000.

(6) Where the information or document contains more than one inaccuracy in respect of which condition 1, 2 or 3 is met, a penalty is payable for each such inaccuracy.

Penalties under Chapter 5: general

Assessment of penalties under Chapter 5

153

(1) Where a person becomes liable for a penalty under this Chapter, WRA must—

(a) assess the penalty, and

(b) issue a notice to the person of the penalty assessed.

(2) An assessment of a penalty under section 146 or 147 must be made within the period of 12 months beginning with the day on which the person became liable to the penalty.

(3) But in a case involving an information notice against which a person may appeal, an assessment of a penalty under section 146 or 147 must be made within the period of 12 months beginning with the latest of the following—

(a) the day on which the person became liable to the penalty,

(b) if no appeal against the notice is made, the end of the period in which such an appeal could have been made, and

(4) An assessment of penalties under section 150 must be made—

(a) at the end of the period of 7 days beginning with the first applicable day, and

(b) at the end of each subsequent period of 7 days that includes an applicable day.

(5) An assessment of a penalty under section 151 must be made within the period of 12 months beginning with the day on which the Upper Tribunal decided that it was appropriate for the penalty to be imposed.

(6) An assessment of a penalty under section 152 must be made—

(a) within the period of 12 months beginning with the day on which the inaccuracy first came to the attention of WRA, and

(b) within the period of 6 years beginning with the day on which the person became liable to the penalty.

CHAPTER 6 — PAYMENT OF PENALTIES

Payment of penalties

154

A penalty under this Part must be paid before the end of the period of 30 days beginning with the day on which notice of the penalty was issued (but see section 182).

CHAPTER 7 — SUPPLEMENTARY

Double jeopardy

155

A person is not liable to a penalty under this Act in respect of anything if the person has been convicted of an offence in relation to it.

Power to make regulations about penalties

156

(1) The Welsh Ministers may by regulations make provision (or further provision) about—

(a) the amounts of penalties under this Part;

(b) the procedure for assessing penalties under this Part.

(2) Regulations under this section may modify any enactment (including this Act).

(3) Regulations under this section may not apply—

(a) to a failure beginning before the day on which the regulations come into force, or

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