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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Penalties for Failure to Notify: Calculating the penalty: Calculation process: Unprompted disclosure calculation example - more than 12 months late

Viktor has notified us of his tax liability 15 months late. His failure to notify sooner was deliberate but not concealed. The notification was unprompted. The PLR is £55,000.

Step 1

The percentage for the quality of the disclosure (a) has been calculated as 80%.

Step 2

The maximum penalty (b) is 70% and the minimum penalty (c) is 20%.

So the maximum disclosure reduction (d) is 70 - 20 = 50%.

Step 3

The actual reduction percentage for disclosure (e) is 50 x 80% = 40%.

Step 4

Penalty percentage to be charged (f) is 70% - 40%= 30%.

Step 5

The penalty to be charged (g) is £55,000 x 30% = £16,500.