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HMRC internal manual

Compliance Handbook

Charging penalties: calculating penalties: the information you need to calculate a penalty: inaccuracies

Before you can calculate a penalty you will have

  • calculated the potential lost revenue (PLR), see CH82150, and for delayed tax cases, see CH82390, and agreed it with your manager and, if possible, the taxpayer
  • in cases involving offshore matters, established the territory category, see CH403140
  • established the type of behaviour, see CH402000 
  • established the type of disclosure, see CH403202 
  • determined any reductions for quality of disclosure, see CH403203 
  • determined any special reduction, see CH403250 
  • in Income Tax or CIS enquiries, checked the filing date to see if any tax geared failure to file penalties need to be deducted from the inaccuracy penalty, see CH404450.

You will need these details for each tax period and each tax regime.

In VAT cases, action to update the VAT mainframe is needed to obtain the PLR, see CH403350.