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HMRC internal manual

Compliance Handbook

Penalties for Failure to Notify: Types of failure to notify: Deliberate but not concealed

A failure to notify, see CH71220, is deliberate but not concealed if the person

  • knows that they are required to notify us about a relevant obligation, see CH71300,
  • is able to do so, but
  • does not do so.

This includes cases where a person has deliberately

  • failed to keep the records necessary to know when a notification is required even though they knew it was likely that the conditions for notification would be met.
  • failed to check or seek advice when they knew it was likely that they would have to notify a relevant tax obligation.

Whilst upon the facts a first failure could perhaps be demonstrated to be careless, this should not be the default position and you should always consider whether it was deliberate behaviour. A claim that second and subsequent failures are also careless should be critically examined as the expectation is that these failures will be deliberate. For example, a newly self employed person who has not previously made a return may not be expecting to pay any tax in relation to the business before the final date for notifying chargeability for their first tax year (that is, the following 5th October). By the time that the person is required to notify chargeability in relation to the second tax year in which they traded, a claim that they still didn’t expect to pay any tax is likely to be untenable. In complex cases, or where a pesron has substantial offshore assets or investments, if they don’t understand their obligations and they fail to check or seek advice from a recognised tax professional, any failure to notify is likely to be deliberate. 

Although the penalties for deliberate inaccuracies are civil monetary penalties, we also have a criminal investigation policy and will refer the most serious cases for consideration of criminal proceedings where appropriate.

For practical examples see CH72180.

FA08/SCH41/PARA5 (1)(b)