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HMRC internal manual

Compliance Handbook

Offshore matters: inaccuracies penalties: penalty ranges

Please note that for 2016-17 and later periods there are different penalty percentage ranges for all three offshore categories. The minimum penalty for ‘Deliberate’ and ‘Deliberate and Concealed’ behaviours were all increased by 10% for years 2016- 17 onwards by virtue of Schedule 21 FA 2016.

These penalty ranges only apply to income tax, capital gains tax and inheritance tax, for standard penalty rates, see CH73200.

Penalty Percentage Rates for periods up to and including 2015-16

Category Behaviour Type of Disclosure Minimum Penalty Maximum Penalty
Category 1 Careless Unprompted 0% 30%
Category 1 Careless Prompted 15% 30%
Category 1 Deliberate Unprompted 20% 70%
Category 1 Deliberate Prompted 35% 70%
Category 1 Deliberate and concealed Unprompted 30% 100%
Category 1 Deliberate and concealed Prompted 50% 100%
         
Category 2 Careless Unprompted 0% 45%
Category 2 Careless Prompted 22.5% 45%
Category 2 Deliberate Unprompted 30% 105%
Category 2 Deliberate Prompted 52.5% 105%
Category 2 Deliberate and concealed Unprompted 45% 150%
Category 2 Deliberate and concealed Prompted 75% 150%
         
Category 3 Careless Unprompted 0% 60%
Category 3 Careless Prompted 30% 60%
Category 3 Deliberate Unprompted 40% 140%
Category 3 Deliberate Prompted 70% 140%
Category 3 Deliberate and concealed Unprompted 60% 200%
Category 3 Deliberate and concealed Prompted 100% 200%

The penalty ranges for a Category 1 offshore matter are the same as the penalty ranges for onshore matters up to and including 2015-16.

Penalty Percentage Rates for periods commencing with 2016-17 and for later periods

Category Behaviour Type of Disclosure Minimum Penalty Maximum Penalty
Category 1 Careless Unprompted 0% 30%
Category 1 Careless Prompted 15% 30%
Category 1 Deliberate Unprompted 30% 70%
Category 1 Deliberate Prompted 45% 70%
Category 1 Deliberate and concealed Unprompted 40% 100%
Category 1 Deliberate and concealed Prompted 60% 100%
         
Category 2 Careless Unprompted 0% 45%
Category 2 Careless Prompted 22.5% 45%
Category 2 Deliberate Unprompted 40% 105%
Category 2 Deliberate Prompted 62.5% 105%
Category 2 Deliberate and concealed Unprompted 55% 150%
Category 2 Deliberate and concealed Prompted 85% 150%
         
Category 3 Careless Unprompted 0% 60%
Category 3 Careless Prompted 30% 60%
Category 3 Deliberate Unprompted 50% 140%
Category 3 Deliberate Prompted 80% 140%
Category 3 Deliberate and concealed Unprompted 70% 200%
Category 3 Deliberate and concealed Prompted 110% 200%

The penalty ranges for ‘Careless’ behaviour are the same as they were for periods up to and including 2015-16, so for example, the penalty ranges for a Category 1 offshore matter with careless behaviour are the same as the ranges for onshore matters irrespective of the period, see CH82510.

For example

For an unprompted disclosure of a deliberate but not concealed inaccuracy within category 2, the maximum penalty is 105% and the minimum penalty is 40%. The extent of the quality of disclosure reduction, see CH82430, gives the point between the maximum 105% and the minimum 40% at which the penalty lies.

Where an offshore matter or offshore transfer, see CH100000, is a factor in the disclosure, Schedule 21 FA 2016 introduced a new element to the quality of disclosure for years 2016-17 and later. ‘Additional information’ is now to be taken into account alongside telling, helping and giving when considering the quality of any disclosure to HMRC. This new element only applies to offshore matters and offshore transfers. See CH117000 for further guidance.

FA07/SCH24/PARA10A