CH73200 - Penalties for Failure to Notify: Calculating the penalty: Penalty reductions for quality of disclosure: Maximum and minimum penalties for each type of behaviour
The following tables show the standard maximum and minimum penalty percentages for each type of failure. These are dependent on
- the type of failure, see CH72100
- whether the disclosure is unprompted or prompted, see CH73120, and
- the time at which a non-deliberate failure is disclosed, see CH73180.
Please note however that different maximum and minimum penalties may apply where the failure to notify involves an offshore matter or offshore transfer and the tax at stake is income tax or capital gains tax, see CH114600 for the relevant offshore penalty ranges.
The rates below apply to onshore matters for all periods and Category 1 offshore matters up to and including 2015-16.
Unprompted disclosure
| Types of behaviour | Deliberate and concealed | Deliberate | Non-Deliberate |
|---|---|---|---|
| Maximum penalty | 100% | 70% | 30% |
| Minimum penalty | Deliberate and concealed | Deliberate | Non-Deliberate |
|---|---|---|---|
| HMRC become aware of the failure more than 12 months after the tax becomes unpaid | 30% | 20% | 10% |
| HMRC become aware of the failure within 12 months of the tax becoming unpaid | 30% | 20% | 0% |
As shown, it is possible to reduce the penalty to nil for an unprompted disclosure where the failure to comply with a relevant obligation is non-deliberate and HMRC become aware of the failure within 12 months of the time at which tax first becomes unpaid.
See CH73180 for an example of when tax first becomes unpaid.
Prompted disclosure
| Types of behaviour | Deliberate and concealed | Deliberate | Non-Deliberate |
|---|---|---|---|
| Maximum penalty | 100% | 70% | 30% |
| Minimum penalty | Deliberate and concealed | Deliberate | Non-Deliberate |
|---|---|---|---|
| HMRC become aware of the failure more than 12 months after the tax becomes unpaid | 50% | 35% | 20% |
| HMRC become aware of the failure within 12 months of the tax becoming unpaid | 50% | 35% | 10% |
The point at which HMRC become aware of the failure will depend on the facts of the case.
FA08/SCH41/PARA6
FA08/SCH41/PARA13