The Treasury has published a draft Order (The Finance Act 2009, Schedule 56 (Appointed Day and Consequential Provisions) Order 2010 appointing 6 April 2010 as the day on which the penalty regime for failure to make income tax payments, set out in Sch 56 FA 2009 comes into force.

This applies to scheme administrators in respect of any quarterly accounting for tax return for a period ending on or after 30 September 2010. Under s.254 FA 2004, a return is due within 45 days of the end of the period to which it relates. If a tax payment is due and not paid at the same time, interest becomes due as well and HMRC must issue an assessment to the scheme administrator under SI 2005/3454. Where the payment remains outstanding 30 days after it was due, Schedule 56 prescribes a penalty of 5% of the unpaid tax.

This will serve to only heighten the anxiety within the industry over the failure to date by HMRC to implement the Scheme Sanction Charge (FA 2004 s.239) regime. Although consequential upon the annual Event Report rather than the quarterly AFT return, the SSC is another source of uncertainty the industry does not deserve. The problem is that under s.240 the 40% SSC is reduced by 25% if the member or the employer as appropriate has paid the unauthorised payment charge; but the scheme administrator will not know that unless the member/employer actually tells him (HMRC has so far declined to relay this key information). Where a SSC is due but not paid, HMRC must issue an assessment as above, but to date HMRC has not raised any Scheme Sanction Charge (SSC) assessments.