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HMRC internal manual

Compliance Handbook

Penalties for Failure to Notify: Calculating the penalty: Penalty reductions for quality of disclosure: Telling

Telling includes

  • admitting the failure
  • disclosing the failure in full
  • explaining how and why the failure occurred.

What is important is the timing, see CH82444, nature and extent of the telling of the disclosure.


Timing should take into considerationhow long it has taken someone to come forward to put their tax affairs in order. When the person tells you about an act or failure they must tell you all the facts at that time. In some instances the person may have to do very little to gain the full reduction for telling. For example, a person may simply need to tell us that they are liable to income tax for the tax year. 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 CH73360 for further guidance.

Nature {.filledcircle}

The nature covers why the failure occurred. The person needs to show a positive approach to telling what has happened not just reacting to questions unless this was clearly all that was required or all that the person was capable of, taking into account their abilities and circumstances.

Extent {.filledcircle}

The extent is whether everything is disclosed to us. If there is only a partial disclosure then a full reduction will not be due. There is an overlap here with ‘helping’ - a disclosure that makes no reference to the scale of a failure is not considered to be a complete disclosure.

Overall, the telling to you about the disclosure must be positive and as complete as possible, taking into account the person’s circumstances and ability, in order to obtain the full reduction.

But you should not penalise the person for not admitting the failure if

  • they put forward a tenable argument that there was no failure, or
  • they don’t tell us about matters that they know we are already aware of.