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HMRC internal manual

Compliance Handbook

Offshore matters: asset moves penalties: action to take

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

You must not take action in relation to a penalty under Schedule 21 FA 2015 without referring the case to TALA.

Assessing or settling the penalty - only if you have permission from TALA

Once we have established that a person is liable to a penalty for an offshore asset move we will normally assess the penalty. Alternatively, the person can make us an offer to settle the tax, interest and penalties by contract settlement, see CH411050.

The penalty assessment is enforceable in the same way as an assessment ‘to tax’. This means that the rules that apply to the tax or duty that the penalty relates to also apply to the penalty assessment.

Before you assess a penalty or penalties, following TALA advice, you must decide

  • the amount of the penalty or penalties
  • which tax period the penalty or penalties relates to.

When have permission from TALA to assess a penalty or penalties you must

  • notify the person about the penalty or penalties you are assessing in a penalty notice (NPPS2), and
  • state in the notice the specific tax period in respect of which the penalty or penalties are being assessed. This will be the tax period in which the offshore asset move takes place.

The penalty notice will tell the person what they owe, when they must pay it and their appeal rights.

Although more than one penalty can be included in a notice, you must include a separate entry in the notice in relation to each one.

If you intend to include the penalty in a contract settlement, following TALA advice, you will still need to tell the person how much the penalty is, but the contract will stand in place of the assessment. You will find guidance on contract settlements at EM6000 for direct tax and IHTM36221 for Inheritance Tax (inaccuracy penalties only). The time limit for assessing the offshore asset move penalty is the same as for the original penalty.

If the underlying penalty is amended, the offshore asset move penalty must be amended at the same time to ensure it remains at 50 per cent of the amount of the underlying penalty.

Appeals

A person can appeal against our decision to impose an offshore asset move penalty.

If the appeal cannot be settled by agreement (with or without a review) the person may notify their appeal to the tribunal, see the Appeals, Reviews and Tribunals Guide (ARTG).

The tribunal may affirm or cancel our decision.