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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
, see all updates

Penalties for Failure to Notify: Calculating the penalty: Penalty reductions for disclosure: Maximum and minimum penalties for failure to notify involving an offshore matter and income tax or capital gains tax: Categories of failure

The guidance in this page applies only where

  • the tax at stake is income tax or capital gains tax and
  • the failure to notify involves an offshore matter and
  • the relevant obligation occurs on or after 6 April 2012.

There are three categories of failure to notify that determine the level of the maximum and minimum penalties. An offshore matter, see CH73212, can fall into any one category or even into more than one category. To decide which category a failure falls into you need to know the territory in which the offshore matter occurred. CH73214 explains how territories are allocated to the different categories. See CH73215 for examples of how to decide which category a failure falls into.

Category 1

A failure to notify is in category 1 if it involves

  • a domestic matter (anything that is not an offshore matter), or
  • an offshore matter and

  • the offshore matter is in a category 1 territory, or

  • the tax at stake is not income tax or capital gains tax.

Most failures to notify will fall into category 1. The standard maximum and minimum penalty percentages apply for this type of failure, see CH73200.

Category 2

A failure to notify is in category 2 if

  • it involves an offshore matter in a category 2 territory, and
  • the tax at stake is income tax or capital gains tax.

There are higher maximum and minimum penalty percentages for failures to notify in category 2 and category 3. The percentages for category 2 are at CH73216.

Category 3

A failure to notify is in category 3 if

  • it involves an offshore matter in a category 3 territory, and
  • the tax at stake is income tax or capital gains tax.

There are higher maximum and minimum penalty percentages for failures to notify in category 2 and category 3. The percentages for category 3 are at CH73217.

FA08/SCH41/PARA6A