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HMRC internal manual

Compliance Handbook

Penalties for Failure to File on Time: Calculating the penalty: Penalty reductions for disclosure: Determining the quality of disclosure

To arrive at the disclosure reduction you need to assess the quality of each of the three elements of the disclosure (telling, helping and giving access, see CH63220). Do this by reference to

  • timing
  • nature, and
  • extent.

The guidance at CH63260 for telling, CH63280 for helping and CH63300 for giving access, explains the circumstances that you will need to take into account when considering failure to file on time situations.

When you have taken all relevant factors into account the percentage you have arrived at by totalling the three elements of the disclosure (telling, helping and giving access, see CH63220) will reflect the overall quality of the disclosure. Consider any representations made by the person. They may be able to offer evidence which leads you to a different view of the disclosure.

It’s important to note that the person can provide information to qualify for a reduction for disclosure but still not send in the outstanding return or other document.

At this point you should take time to consider whether the disclosure reduction is reasonable taking into account all the circumstances of the case. But remember that the penalty percentage must sit between the maximum and minimum levels set by law, see CH63200.

You then use this percentage to calculate the amount of penalty to assess. For guidance on the process to follow, see CH63500+.

There will be cases where the circumstances are such that little in the way of telling, helping and access is needed to establish the reasons for the person’s failure and the amount of the tax unpaid because of the failure.

You should allow the full reduction for those elements of the disclosure that are not required.

Where a person has taken a significant period to correct their non-compliance in relation to either an onshore or offshore matter, or they would previously have been able to make a disclosure through one of HMRC’s offshore disclosure facilities, they can no longer expect HMRC to give them the full reduction for the quality of disclosure. A ‘significant period ‘is normally considered to be over 3 years but may be less where the overall disclosure covers a longer period.

If you consider that this may apply to your case, see CH63310 for further guidance.


If a person files their return later than 12 months after the filing date it may not be necessary for the person to provide further ‘help’ or you may not need access to further records to verify the amounts on the return. In that case, you would still give the person the maximum reduction for helping and giving access.

There are overlaps between the three elements of disclosure, so a single course of action may qualify for a reduction under more than one heading. Equally a failure to do something or a misleading action may result in a loss of reduction under more than one heading.