Landfill Disposals Tax Penalties Increase for Repeated Payment Failures

Late-payment penalties for Welsh devolved taxes

Late-payment penalties for Welsh devolved taxes depend on the statutory penalty date for the particular liability, not just the original tax due date. If tax remains unpaid, extra 5% penalties can apply for continuing non-payment, and landfill disposals tax (LDT) has stricter rules where repeated late payments within a penalty period lead to higher penalty rates and possible extension of that period.

• The penalty date varies depending on the tax and how the amount became payable, such as under a return, assessment, amendment, correction, charging notice, postponed amount, or tax-credit recovery assessment.
• For land transaction tax (LTT) and LDT due under a return, the penalty date is generally 30 days after the filing date, subject to special rules for some LTT amounts.
• If the failure to pay continues, further penalties of 5% can arise at the 6-month and 12-month stages under the statutory timetable.
• For LDT, repeated failures to pay within a 12-month penalty period trigger higher rates: 2% for an initial further failure, 3% for a second, and 4% for third and later failures.
• The LDT penalty period starts the day after the penalty date, lasts 12 months, and can be extended if another failure happens within that period.
• A separate 5% penalty may apply where the Welsh Revenue Authority assesses recovery of a tax credit that should not have been paid, or has become excessive, and the assessed amount is not paid on time.

Scroll down for the full analysis.

Penalties for late payment of Welsh devolved taxes: penalty dates, repeated failures, and continuing non-payment

This page explains how late-payment penalties work for Welsh devolved taxes in the material provided, especially land transaction tax (LTT) and landfill disposals tax (LDT). The key points are when a penalty starts, how extra penalties arise if tax remains unpaid, and why repeated late payment of LDT can trigger higher rates.

What this rule is about

The source deals with penalties for not paying devolved tax on time. It covers three linked issues.

First, it identifies the “penalty date”. This is the date from which the taxpayer becomes liable to a late-payment penalty for a particular amount of tax.

Second, it says that if the tax is still unpaid for long enough after that point, further penalties can arise for continuing failure to pay.

Third, for landfill disposals tax only, it introduces a tougher regime where repeated failures to pay within a set period lead to higher penalty percentages.

This matters because late-payment penalties are not tied only to the original due date for the tax. The rules use a separate penalty timetable. In practice, you need to identify exactly which amount is unpaid, why it is payable, and which item in the penalty-date table applies.

What the official source says

The source says that the penalty date depends on the type of tax and how the amount became payable.

For example:

• For LTT payable under a buyer’s tax return, the penalty date is 30 days after the filing date for the return, unless the amount falls within special items for deferred or refused amounts.
• For LDT payable under a tax return, the penalty date is 30 days after the filing date for the return.
• For amounts arising from WRA determinations, assessments, amendments, corrections, tax-credit recovery assessments, charging notices, postponed amounts, and certain anti-avoidance adjustments, the table sets a specific penalty date by reference to when the amount was or should have been paid.

The source then states that if the failure to pay continues, further penalties arise:

• a 5% penalty if the failure continues within 6 months, beginning with the date 30 days before the penalty date
• a further 5% penalty if the failure continues within 12 months, beginning with the date 30 days before the penalty date

For LDT, the source adds a specific regime for multiple failures to pay. Once a taxpayer becomes liable to a penalty for failure to pay LDT, a penalty period begins on the day after the penalty date and ends 12 months later. If there is another failure to pay LDT within that period, a higher penalty rate applies. The source gives these rates:

• initial failure within the penalty period: 2% of the unpaid tax
• second failure within the penalty period: 3% of the unpaid tax
• third and subsequent failures within the penalty period: 4% of the unpaid tax each time

The source also says the penalty period can be extended on the same basis where there are further failures to pay LDT.

Separately, where WRA assesses a taxpayer to recover a tax credit that should not have been paid, or has become excessive, and the assessed amount is not paid on time, WRA may impose a penalty of 5% of the amount payable under that assessment.

What this means in practice

The practical starting point is that a late-payment penalty does not always arise immediately when the tax due date passes. Instead, you must identify the statutory penalty date for that particular liability.

Once the penalty date is reached, the taxpayer becomes exposed to a penalty for failure to pay. If the amount remains unpaid long enough after that, additional 5% penalties can be added for continuing non-payment.

For LDT, there is an additional compliance risk. Repeated late payment is treated more severely than a one-off failure. After one penalty event, later LDT payment failures within the penalty period can attract higher percentage penalties. The penalty period also does not necessarily end after 12 months if another failure occurs within it, because the source says it can be extended.

This means that for LDT, a business with recurring payment problems may move into a higher-penalty cycle. Each new failure can increase the rate and extend the period during which future failures are treated more harshly.

For LTT, the source material here does not set out a similar escalating regime for repeated failures. The repeated-failure rules in the material are specific to LDT.

How to analyse it

A sensible way to work through the issue is as follows.

1. Identify the tax and the unpaid amount.

   Is it LTT, LDT, or another devolved tax amount? Is it due under a return, an amendment, a correction, an assessment, a determination, a charging notice, a postponed amount, or a tax-credit recovery assessment?

2. Find the correct penalty-date category.

   The source provides a table with different penalty dates for different types of liabilities. This is important because the penalty date is not the same in every case.

3. Work out whether the taxpayer has reached the point of liability to a late-payment penalty.

   Under the source, liability arises on the relevant penalty date.

4. Check whether the amount remained unpaid long enough for continuing-failure penalties to arise.

   The source provides two further 5% penalties for continuing failure to pay.

5. If the tax is LDT, ask whether there have been earlier failures to pay within the penalty period.

   If yes, the percentage for the new failure may be higher. You also need to check whether the penalty period has been extended because of an earlier further failure.

6. If the amount arises from recovery of a tax credit, check the separate 5% rule.

   The source treats failure to repay an assessed tax-credit recovery amount as a separate penalty situation.

Example

The source gives an LDT example.

Company A should pay LDT of £100,000 on 31 July 2018 for the return period 1 April 2018 to 30 June 2018, but does not pay. WRA imposes a penalty of £1,000, being 1% of the unpaid tax. The penalty period then runs from 1 August 2018 to 31 July 2019.

If Company A later fails to pay a further £300,000 of LDT on 31 January 2019 for the return period 1 October 2018 to 31 December 2018, that second failure falls within the existing penalty period. The source says the company is then liable to a penalty of £6,000, being 2% of £300,000, and the penalty period is extended to 31 January 2020.

The source then says that a third failure within the penalty period gives rise to a 3% penalty, and the fourth and later failures give rise to 4% penalties.

The practical lesson is that once an LDT payer has one penalised failure, later failures can become progressively more expensive.

Why this can be difficult in practice

The main difficulty is identifying the correct penalty date. The source uses a detailed table, and the answer depends on how the amount became payable. A taxpayer may have several different liabilities at once, each with its own timetable.

There is also some complexity in the way the continuing-failure penalties are described. The source says the 6-month and 12-month periods begin with the date 30 days before the penalty date. Readers need to be careful not to assume these periods run simply from the original filing date or original payment date without checking the statutory wording behind the summary.

The LDT repeated-failure rules also require careful tracking over time. You need to know:

• when the first relevant penalty arose
• when the penalty period started and ended
• whether a later failure occurred within that period
• whether that later failure extended the penalty period
• how many prior failures already count within the running period

Another practical point is that the source distinguishes between different kinds of amount: tax shown on a return, tax assessed by WRA, additional tax arising from an amendment or correction, amounts connected with deferred LTT, postponed amounts, and tax-credit recovery assessments. The penalty consequences may be similar in broad terms, but the trigger date can differ.

Key takeaways

• Late-payment penalties depend on the statutory penalty date, which varies according to the type of devolved tax liability.
• If tax remains unpaid, further 5% penalties can arise for continuing failure to pay.
• For LDT, repeated failures to pay within the penalty period can lead to higher penalty rates and an extended penalty period.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Landfill Disposals Tax Penalties Increase for Repeated Payment Failures

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