Multiple Penalties Possible for Non-Compliance with Devolved Tax Legislation

When more than one Welsh tax penalty can apply

A single mistake under Welsh devolved tax law can lead to more than one penalty if it breaches more than one legal obligation. The Welsh Revenue Authority will consider each penalty separately under the relevant law, and where penalty amounts are variable, it will also look at the total combined effect to make sure the overall result is proportionate.

• More than one penalty may apply at the same time if the same facts involve separate legal failures.
• Each penalty must be assessed on its own facts, legal test and statutory basis.
• The WRA says it will review the combined amount of variable penalties to check that the total is fair and proportionate.
• Proportionality depends on the taxpayer’s circumstances, behaviour and the amount of tax understated or revenue lost.
• An example is where a landfill operator both fails to use an agreed weighing method and files a careless inaccurate return based on the wrong weight.
• In practice, taxpayers and advisers should check for both return errors and separate breaches of specific statutory requirements.

Scroll down for the full analysis.

When more than one Welsh tax penalty may apply

This page explains what happens when a taxpayer breaches more than one obligation under Welsh devolved tax law and the Welsh Revenue Authority (WRA) considers charging more than one penalty. The key point is that separate penalties can apply at the same time, but the WRA says it will look at the combined outcome to make sure the total is proportionate.

What this rule is about

Welsh tax legislation can impose different penalties for different kinds of failure. One penalty may relate to failing to meet a specific operational requirement. Another may relate to filing an inaccurate return. If the same set of facts gives rise to both failures, the question is whether both penalties can be charged.

The official material says that, in some cases, the answer is yes. Each penalty must be considered on its own legal basis. But where the amount of a penalty is not fixed, the WRA will also look at the overall effect of charging them together.

This matters because a taxpayer may assume that one mistake leads to only one penalty. That is not necessarily right. A single course of conduct can trigger multiple penalty provisions if more than one legal obligation has been broken.

What the official source says

The source says that more than one penalty may be due where a taxpayer has failed to comply with obligations under devolved tax legislation. The WRA will decide whether each penalty applies on its own merits, based on the facts.

It also says that where a penalty amount is not fixed, the WRA will consider the aggregate effect of the combined penalties. The stated aim is to ensure that the overall result is proportionate to:

• the taxpayer’s circumstances,
• the taxpayer’s behaviour, and
• the amount of tax understated, or lost through an inflated loss, repayment claim, or tax credit claim.

The example given concerns landfill disposals tax. A company had agreed an alternative weighing method with the WRA for measuring waste disposed of at its landfill site. The company then failed to apply that agreed method correctly. That failure also caused an incorrect tax return to be filed, because the wrong weight was used to calculate taxable disposals.

When the WRA opened an enquiry, it concluded that the inaccuracy arose because the company had failed to take reasonable care. On those facts, the source says the company was potentially liable to:

• a penalty of up to £500 under section 61 of the Landfill Disposals Tax Act 2017 for failing to determine taxable weight properly, and
• a penalty of up to 30% of the potential lost revenue under section 129 of the Tax Collection and Management (Wales) Act for a careless inaccuracy in a return.

The source then says that, in a case like this, the WRA will consider not only whether each penalty can be reduced under its own rules, but also whether the combined total is proportionate to the circumstances and the amount of devolved tax understated.

What this means in practice

The practical message is that you need to separate out the different legal failures. Do not ask only, “Was the return wrong?” Also ask, “Was there a separate failure to comply with a specific statutory requirement that carries its own penalty?”

If the answer to both questions is yes, the WRA may seek to apply both penalties.

That does not mean the WRA simply adds penalties together without further thought. The source indicates a two-stage approach:

1. First, decide whether each penalty provision is engaged on its own facts and legal test.
2. Second, where the penalty amounts are not fixed, consider the combined result and whether it is proportionate overall.

This is important because different penalties may work differently. One may be capped at a fixed monetary amount. Another may be calculated by reference to potential lost revenue. One may depend on behaviour such as carelessness. Another may depend on failure to comply with a technical requirement, regardless of the return position.

So, even where the same error sits behind everything, the legal route to each penalty may be different.

How to analyse it

A sensible way to analyse a possible multiple-penalty case is to ask the following questions.

• What were the separate legal obligations? Identify each requirement imposed by the relevant devolved tax legislation.
• Which obligations were breached? A return inaccuracy and an operational failure may be distinct breaches.
• Does each penalty provision apply on its own terms? Do not assume one penalty displaces another unless the legislation says so.
• What behaviour is alleged? For example, the source example turns on a failure to take reasonable care.
• Is the penalty fixed or variable? This matters because the source specifically refers to proportionality where the amount is not fixed.
• What is the tax effect? The amount of devolved tax understated, or other revenue loss, is part of the proportionality assessment.
• What is the combined financial result? Even if each penalty is technically available, the WRA says it will consider the aggregate outcome.

For conveyancers, in-house tax teams, and advisers, the practical implication is that a compliance problem should be mapped across all relevant obligations, not just the return itself. For taxpayers, it means that correcting an inaccurate return may not be the whole story if the underlying conduct also breached a separate statutory requirement.

Example

Illustration: a landfill operator has agreed a specific method with the WRA for establishing taxable weight. The operator uses a different method in practice. As a result, the taxable weight is wrong and the return for that period understates tax.

On the source material, two separate penalty issues may arise:

• one for failing to determine taxable weight in the required way, and
• one for submitting a return containing a careless inaccuracy.

The WRA would first consider whether the legal conditions for each penalty are met. If they are, it would then consider any reductions available under the relevant rules and also look at whether the overall penalty burden is proportionate when both are taken together.

Why this can be difficult in practice

The difficult part is often deciding whether there are truly two distinct failures, or whether what happened is better characterised as a single failure with one penalty consequence. The source does not set out a general rule for resolving every overlap. Instead, it says each penalty must be considered on its own merits according to the facts.

Another difficulty is proportionality. The source makes clear that the WRA will consider the aggregate result of combined penalties, but it does not provide a detailed formula for how that overall judgement is made. That means the outcome may depend on the taxpayer’s behaviour, the scale of the tax loss, and the interaction between the relevant penalty regimes.

It is also important not to confuse the existence of two possible penalties with the final amount payable. The source indicates that reductions may be considered under each penalty’s own rules, and then the combined effect is reviewed for proportionality. So the analysis is not just about whether two penalties exist in theory, but about what is fair and legally supportable in the round.

Key takeaways

• One set of facts can give rise to more than one Welsh tax penalty if more than one legal obligation has been breached.
• Each penalty must be tested separately under its own legislation and facts.
• Where penalty amounts are not fixed, the WRA says it will consider the combined total to ensure the result is proportionate.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Multiple Penalties Possible for Non-Compliance with Devolved Tax Legislation

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