ACCA Applied Skills · Taxation (UK) · Penalties for non-compliance
Hana has an income tax balancing payment of £20,000 for 2025/26, due on 31 January 2027. She pays £12,000 on 15 February 2027 and the remaining £8,000 on 20 August 2027. What is the total late payment penalty (ignoring interest)?
The total penalty is £800. Only the £8,000 left unpaid after 30 days is penalised. It attracts 5% at the 30-day stage and a further 5% at six months, giving £400 plus £400. The £12,000 paid within 30 days is not penalised.
- A£400
- B£800Correct
- C£1,000
- D£2,000
Explanation
The £12,000 was paid within 30 days of the due date, so no penalty arises on it. The £8,000 was unpaid at 30 days after the due date (5% = £400) and still unpaid at six months, 31 July 2027 (a further £400). Total is £800. £2,000 wrongly charges 10% on the whole £20,000.
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