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HMRC internal manual

Compliance Handbook

Offshore matters: failure to notify penalties: overview

CH73200 sets out the maximum and minimum penalty percentages that normally apply. Higher maximum and minimum penalty percentages may apply where

  • a failure to notify involves an offshore matter, see CH114200, and
  • the tax involved is income tax or capital gains tax, and
  • the failure to notify is within category 2 or 3, see CH114300.

The law describes 3 categories of failure to notify. CH114300 explains these in detail.

Normally it will be straightforward to decide which category a failure to notify falls into, but sometimes a failure may fall within more than one category, see CH114400. If it does, we treat it as if it were separate failures, one in each relevant category. We calculate the potential lost revenue for each of these separate failures separately and calculate the appropriate penalty for each.

CH114600 and CH114700 set out the higher maximum and minimum penalty percentages for some offshore matters.

For guidance on how to determine reductions for the quality of disclosure, see CH73220.

These higher maximum and minimum penalty percentages also apply in cases involving offshore matters where the PLR arose because the failure to notify chargeability for IT or CGT occurred after a notice to file a self-assessment tax return was withdrawn, see CH72700.