Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Compliance Handbook

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 maximum and minimum penalty percentages for each type of failure 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.

However, different maximum and minimum penalties may apply where the failure to notify involves an offshore matter and the tax at stake is income tax or capital gains tax, see CH73210+.

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