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HMRC internal manual

Compliance Handbook

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

Helping includes

  • giving reasonable help in quantifying the amount of the unpaid tax or tax the person is liable for
  • positive assistance as opposed to passive acceptance or obstruction
  • actively engaging in the work to accurately quantify the tax unpaid or tax the person is liable for
  • volunteering any information relevant to the disclosure.

In considering whether a person has given reasonable help, you should always take account of the abilities and circumstances of the person. You should not, for example, penalise the person for not helping us with matters where the person knows we already have the necessary information.

What is important is the timing, nature and extent of the help the person provides to quantify the unpaid tax or tax the person is liable for.

  • The timing relates to how soon the disclosure is made and the period over which the help is given. As well as there not being any avoidable delays there should be an active approach, providing information and access to records as early as possible.
  • The nature covers whether the help is useful and saves you time and effort in quantifying the tax unpaid. For the person to just appear to be helpful but not actually producing anything of use is not what is required.
  • The extent of the help covers the whole period of the compliance check from start to finish and all aspects of the compliance check. If help is only received for part of the time or in certain aspects you would not give the full reduction.

Overall, helping you with quantifying the tax unpaid or tax the person is liable for must be as active as possible.

For example

  • producing business accounts
  • quantifying unrecorded income or sales (by reference to non-business records or private expenditure)
  • obtaining evidence capable of verification e.g. bank statements
  • attending meetings with you where that is the best way to both quantify the tax unpaid or tax the person is liable for because of the failure and test the disclosure.