Charging penalties: introduction: offshore matters: failure to correct: reductions for disclosure: voluntary or non-voluntary disclosures
The maximum amount of reduction that can be applied depends on whether the disclosure was voluntary or non-voluntary:
- If the disclosure was voluntary the penalty can be reduced from 200% to a minimum of 100% of the tax involved
- If the disclosure was non-voluntary you must restrict the amount of reduction given for disclosure to a maximum of 50% of the tax involved.
A disclosure is voluntary if it is made at a time when the person making it has no reason to believe that we have discovered or are about to discover the failure to correct offshore tax non-compliance. A disclosure will also be treated as voluntary in cases where the customer notifies HMRC of non-compliance and the full extent and details of the disclosure are not known, provided the full details are provided within a reasonable time from when HMRC are notified.
A disclosure would be non-voluntary if a person made the disclosure after:
- we contacted them to tell them we wished to make a compliance check of their return
- we arranged to visit their premises to explore the risks we had identified, or
- HMRC has been supplied with information, under an automatic exchange of information agreement that would, when reviewed, lead to the discovery of the issue being disclosed.
|Disclosure||Range minimum||Range maximum|
|Voluntary||100% of the tax due||200% of the tax due|
|Non-voluntary||150% of the tax due||200% of the tax due|
If a person has failed to correct their offshore tax non-compliance, they can make a full disclosure at any time after that. If they make the disclosure before we tell them that we are starting a check, the disclosure will normally be considered voluntary. At any later time, typically when we start a check, it will be non-voluntary unless the person can show that what we are checking would not have led us to discover the failure.