# Which penalties and powers can HM Revenue and Customs (HMRC) use for the UK Carbon Border Adjustment Mechanism (CBAM)?

Canonical: https://senseible.earth/answers/uk-cbam-penalties-and-assessments

HM Revenue and Customs (HMRC) will extend the use of existing powers and penalties where appropriate, including for failure to notify liability, to submit a return, to pay, errors in returns, failure to disclose tax avoidance schemes, and failure to comply with an information notice. It can also assess tax due and register an importer compulsorily.

## Penalties HMRC lists

- failure to notify HMRC of liability for CBAM
- failure to submit a CBAM return
- failure to pay CBAM
- errors in CBAM returns or other documents relied upon by HMRC
- failure to disclose relevant tax avoidance schemes and serial tax avoidance
- failure to comply with an information notice

## Also in the summary

- A general penalty for failure to comply with specific requirements, such as notifying HMRC when a business address changes or that a business is being carried on by another person after death, incapacity or insolvency.
- Legislation to deter the artificial separation of business activities and prevent circumvention of liability.
- Criminal offences for fraudulent evasion and deliberate misstatement of CBAM.
- If a person fails to register, or gives an incomplete or inaccurate return, HMRC will make an assessment of the CBAM due and notify the liable person.
- If a person fails to register, HMRC will be able to register them compulsorily and, if appropriate, assess the tax due.

## Where a supplier's paper sits

Our reading, not HMRC's: the emissions intensity and the verification report behind it feed the return, so a wrong figure from your plant could become an error on your buyer's return. HMRC's summary does not say how a penalty would be shared with a supplier. Agree in your contract who corrects a figure and by when.

## What Senseible does here

Senseible reads fuel invoices and electricity bills into dated records, which feed a plant's emissions figure. We build the figure from your records and check every figure in-house; for the UK it must then be verified by a verifier accredited for UK CBAM. Have your own verifier? Send it to them. It does not file returns or advise on penalties.

- [The records penalty](https://senseible.earth/answers/uk-cbam-records-penalty-and-six-year-clock)
- [Correcting a return](https://senseible.earth/answers/uk-cbam-amend-return-three-years)
- [Who can verify the figure](https://senseible.earth/answers/uk-cbam-consultant-cannot-verify)

Sources: [HM Revenue and Customs, Carbon Border Adjustment Mechanism (CBAM): Policy summary (updated 2 November 2026)](https://www.gov.uk/government/publications/carbon-border-adjustment-mechanism-cbam-policy-summary/carbon-border-adjustment-mechanism-cbam-policy-summary)

Last reviewed 2026-11-05. HM Revenue and Customs says the details in its policy summary may be subject to change. Re-check the policy summary and the keeping-records page before relying on a date or condition.