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HMRC internal manual

Compliance Handbook

Charging penalties: calculating penalties: reductions for disclosure: timing of disclosure or correction

For any disclosure or correction made after 5 September 2016 you must take into account the timing of the disclosure or correction before working out the further reductions for telling, helping and giving.

You should consider the length of time

  • between when the inaccuracy, failure to notify, or withholding of information occurred and
  • when the person began to tell us about them.

Where they took a significant period to correct their non-compliance in relation to

  • either an onshore or offshore matter, or
  • where they would previously have been able to make their disclosure through one of HMRC’s offshore facilities

you should, normally, restrict the amount of reduction for disclosure. We consider a ‘significant period’ to be over 3 years but it may be less where the overall disclosure covers a longer period.

You do this by restricting the maximum reduction by 10% to reflect the time that they have taken to begin telling us about the inaccuracy before working out any further reductions for the quality of telling, helping and giving.

The total reduction, including the 10% restriction for timing, is calculated in NPPS when you have

  • selected ‘Yes’ if the 10% restriction for timing applies
  • input the percentage reductions for Telling, Helping and Giving (as well as the behaviour, and a decision on whether disclosure was unprompted or prompted).

For examples and more detailed guidance on restriction for timing for

  • inaccuracies and under-assessment, see CH82465 
  • failure to notify where the behaviour is deliberate or deliberate and concealed, see CH73360
  • failure to file and deliberate withholding of information, see CH63310
  • VAT and Excise wrongdoing penalties, see CH95110.