Explanatory note

This Order brings into force the provisions of Schedule 24 to the Finance Act 2007 (“Schedule 24”). It also contains savings provisions. Schedule 24 introduced a single new penalty regime for incorrect returns for income tax, corporation tax, PAYE and VAT where the penalty is determined by the amount of tax understated, the nature of the behaviour giving rise to the understatement and the extent of disclosure by the taxpayer.

Article 2 brings into force on the dates specified, and in relation to the tax periods, claims or other liabilities to pay tax specified, those provisions of Schedule 24 which relate to errors in documents, and to failure to notify HMRC of under-assessments of tax.

Article 3 provides that Schedule 24 shall not apply in relation to any tax period for which a return is required to be made before 1st April 2009.

Article 4 preserves the existing penalty provisions for VAT evasion involving dishonest conduct which does not relate to inaccurate returns to, or under-assessments by, HMRC.