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HMRC internal manual

Compliance Handbook

Penalties for inaccuracies: calculating the penalty: delayed tax - impact on potential lost revenue calculation: how to calculate the PLR

You must check the date from which these rules apply for the tax or duty you are dealing with. See CH81011 for full details.

There are special rules for calculating the potential lost revenue (PLR) for a delayed tax inaccuracy, see CH82390. These are instead of the general rules at CH82150+.

The delayed tax provisions in FA07/SCH24/PARA8 set the potential lost revenue (PLR) at 5% of the delayed tax for each year of the delay. If the delay is for a period of less than 1 year then the PLR is 5% of the delayed tax reduced pro-rata equating to 5% a year.

The delay is the gap between the period end date for the return containing the inaccuracy and that for the return where the inaccuracy was, or would have been, reversed, see CH82394.

Once you have calculated the PLR resulting from the delayed tax inaccuracy, follow the normal steps for arriving at the level of the penalty, such as reduction for the quality of disclosure. If the penalty is for a careless inaccuracy, it can be considered for suspension, see CH83100 onwards.

For examples of delayed tax see CH82394-7.