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HMRC internal manual

Compliance Handbook

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Publishing details of deliberate tax defaulters: The Publication questions: Question 5 - Does the qualifying potential lost revenue exceed £25,000: Qualifying potential lost revenue - examples

We can only publish a person’s details if we can answer ‘yes’ to all five publication questions at CH190620.

The following examples show how qualifying PLR, see CH190724, is calculated in different circumstances. In each case, the person receives a 50% reduction of their penalties for deliberate defaults for the quality of their disclosure.

Example 1 
This is a cross-tax compliance check.

Example 2
This is an income tax check followed by a separate VAT check.

Example 3
This is an income tax check followed by a later check into the same tax periods.

Example 1

A cross-tax compliance check into Kevin’s affairs reveals the following inaccuracies, PLR and qualifying PLR. The qualifying PLR is the total PLR relating to qualifying relevant penalties, see CH190704.

  Penalty for… PLR Qualifying PLR
       
Year ended 5 April 2014 Careless inaccuracy £12,000 -
  Deliberate and concealed inaccuracy    
£10,000      
£10,000      
VAT return period 06/14 Deliberate inaccuracy £10,000 £10,000
VAT return period 03/15 Careless inaccuracy £6,000 -
Year ended 5 April 2015 Deliberate inaccuracy £8,000 £8,000
  Deliberate and concealed inaccuracy    
£14,000      
£14,000      
Year ended 5 April 2016 Careless inaccuracy £5,000 -
  Deliberate and concealed inaccuracy    
£3,000      
£3,000      
  Total £68,000 £45,000

There are several qualifying relevant penalties from this one compliance check. The qualifying PLR is more than £25,000 so, as long as the answer to all of the other publication questions, see CH190620, is also ‘yes’, we may publish Kevin’s details.

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Example 2

A VAT assurance visit to Jivanta’s business reveals the following inaccuracies, PLR and penalties.

  Penalty for… PLR Qualifying PLR
       
VAT return period 06/14 Deliberate inaccuracy £8,000 £8,000
VAT return period 03/15 Careless inaccuracy £1,000 -
  Total £9,000 £8,000

The qualifying PLR is below £25,000 so we cannot publish details of Jivanta’s deliberate default. The compliance check is closed and Jivanta pays the additional tax and penalties.

Eighteen months later a compliance check into Jivanta’s 2014 and 2015 SA returns reveals the following inaccuracies, PLR and qualifying PLR.

  Penalty for… PLR Qualifying PLR
       
Year ended 5 April 2014 Careless inaccuracy £13,000 -
  Deliberate and concealed inaccuracy    
£10,000      
£10,000      
Year ended 5 April 2015 Deliberate inaccuracy £9,000 £9,000
  Total £32,000 £19,000

This is a different investigation. The qualifying PLR for this check is below £25,000 so we cannot publish details of Jivanta’s deliberate defaults. We cannot add this qualifying PLR to that from the earlier compliance check (£8,000). This is because, even though the earlier compliance check covered VAT periods that fall within the SA periods covered by the later compliance check, the two compliance checks are separate investigations, see CH190688.

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Example 3

A compliance check into Serge’s income tax affairs reveals the following inaccuracies, PLR and qualifying PLR.

  Penalty for… PLR Qualifying PLR
       
Year ended 5 April 2011 Careless inaccuracy £5,000 -
Year ended 5 April 2012 Deliberate inaccuracy £8,000 £8,000
Year ended 5 April 2013 Deliberate inaccuracy £13,000 £13,000
  Total £26,000 £21,000

The qualifying PLR is below £25,000 so we cannot publish details of Serge’s deliberate defaults. We close the compliance check and Serge pays the additional tax and penalties.

In 2016 we obtain information that suggests there were other inaccuracies for 2011, 2012 and 2013. After considering whether there are grounds for a criminal investigation in respect of the earlier incomplete disclosure, and deciding not to proceed with one, we start another compliance check which uncovers the following additional inaccuracies, PLR and qualifying PLR.

  Penalty for… PLR Qualifying PLR
       
Year ended 5 April 2011 Deliberate inaccuracy £7,000 £7,000
Year ended 5 April 2012 Deliberate inaccuracy £7,000 £7,000
Year ended 5 April 2013 Deliberate inaccuracy £9,000 £9,000
Year ended 5 April 2014 Careless inaccuracy £2,700 -
  Deliberate inaccuracy £16,000 £16,000
Year ended 5 April 2015 Careless inaccuracy £3,500 -
  Deliberate inaccuracy £18,000 £18,000
  Total £79,200 £57,000

This is a different investigation. The qualifying PLR for the second one is more than £25,000 so we can publish details of Serge’s deliberate defaults uncovered by this check. We cannot add this qualifying PLR (£57,000) to that from the earlier compliance check (£21,000) even though they cover the same tax periods. This is because the relevant penalties arise from different investigations. So we still cannot publish any information relating to the deliberate defaults from the first investigation.