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HMRC internal manual

Compliance Handbook

Penalties for Failure to File on Time: Calculating the penalty: Penalty reductions for disclosure: The penalty percentage ranges and minimum penalties

Calculating the 12 month further penalty

When you are applying a reduction for the quality of disclosure to the maximum penalty in the penalty percentage range there are two minimums to consider.

  1. The penalty percentage cannot be reduced below the minimum penalty percentage in the relevant penalty range.
  2. Once you have calculated the amount of the penalty, this cannot be less than the minimum penalty amount shown below.

The standard penalty ranges for failures to file on time

The table below shows the standard penalty percentage ranges where the failure was either deliberate, or deliberate and concealed, and the failure continued for 12 months. The range of penalty percentages depend on

  • the behaviour in relation to the type of failure (deliberate or deliberate and concealed), see

    • CH62160+ for income tax, capital gains tax, bank payroll tax and registered pension scheme,
    • CH62400+ for CIS, and
    • CH62740+ for machine games duty, and
  • whether the disclosure is unprompted or prompted, see CH63140.

The standard ranges below apply to onshore matters for all periods and Category 1 offshore matters up to and including 2015-16.

The ranges for offshore matters, which only apply to income tax, capital gains tax and registered pension schemes are shown below.

Behaviour Type of Disclosure Minimum Penalty Maximum Penalty
Deliberate Unprompted 20% 70%
Deliberate Prompted 35% 70%
Deliberate and Concealed Unprompted 30% 100%
Deliberate and Concealed Prompted 50% 100%

Penalty ranges for offshore matters

There are differenty penalty ranges where the disclosure involves an offshore matter, see CH112700. For 2015-16 and earlier periods a category 1 offshore matter has the same penalty ranges as onshore matters which are shown in the table above. For 2016-17 and later periods there are different penalty percentage ranges for all three offshore categories, see CH112700.

Minimum penalty amount {#min_pen_amount}

As we show in the table above, we can reduce the penalty percentage for the quality of disclosure.

But even when we apply that percentage we cannot reduce the amount of penalty to less than a minimum amount where the failure was deliberate and the return has been outstanding for 12 months. The minimum amount is

  • £300, or
  • for CIS returns,

    • £1,500 where deliberate but not concealed, and
    • £3,000 where deliberate and concealed.

Also see CH62500 where the person is registered for gross CIS payments only.

There are examples of using the minimum penalty percentage and minimum penalty amount in calculating the penalty at CH63620, CH63680 and CH63700.

See also the charts in the overview of calculating the penalty at CH63020.