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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Penalties for Failure to Notify: Calculating the penalty: Calculation process: Prompted disclosure calculation example - less than 12 months late

James has made a late notification having been prompted. His failure was non-deliberate. The notification was 10 months late. The PLR is £40,000.

Step 1

The percentage for the quality of the disclosure (a) has been calculated as 70%.

Step 2

The maximum penalty (b) is 30% and the minimum penalty (c) is 10%.

So the maximum disclosure reduction (d) is 30 - 10 = 20%.

Step 3

The actual reduction percentage for disclosure (e) is 20 x 70% = 14%.

Step 4

Penalty percentage to be charged (f) is 30% - 14% = 16%.

Step 5

The penalty to be charged (g) is £40,000 x 16% = £6,400.