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HMRC internal manual

Compliance Handbook

Offshore matters: penalties for enablers of offshore tax evasion or non-compliance: in what circumstances is a penalty payable

A penalty is chargeable where

  • a person has encouraged, assisted or otherwise facilitated another person to carry out offshore tax evasion or non-compliance, and
  • the two conditions at CH124400 are satisfied (FA16/Sch20/Para1).

A person carries out offshore tax evasion or non-compliance if they

  • commit a relevant offence, or
  • engage in conduct that makes them liable to a relevant civil penalty relating to income tax, capital gains tax or inheritance tax.

Relevant offence

The relevant offences are

  • cheating the public revenue involving offshore activity
  • fraudulent evasion of income tax involving offshore activity (TMA70/S106A)
  • being chargeable to income tax or capital gains tax on or by reference to offshore income, assets or liabilities, as a result of

    • failing to give notice of being chargeable to tax (TMA70/S106B)
    • failing to deliver a return (TMA70/S106C)
    • making an inaccurate return (TMA70/S106D).

Relevant penalty

A relevant penalty is an existing penalty involving an offshore activity that relates to

  • inaccuracies in a document (FA07/Sch24/Para1)
  • failure to notify (FA08/Sch41/Para1)
  • failure to file on time (FA09/Sch55/Para6)
  • relevant offshore asset moves (FA15/Sch21/Para1).

For detailed guidance on the

  • meaning of offshore activity, see CH124500
  • commencement date for penalties involving overseas matters, see CH111200.