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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Penalties for Inaccuracies: Calculating the penalty: Penalty reductions for disclosure: Maximum and minimum penalties for inaccuracy involving an offshore matter and income tax or capital gains tax: Category 2 penalty range

The guidance in this page applies only where

  • the tax at stake is income tax or capital gains tax and
  • the inaccuracy involves an offshore matter and
  • the person gave HMRC an inaccurate return or other document which relates to 2011-12 or a later year on or after 6 April 2011.

It does not apply to the Construction Industry Scheme (CIS).

Penalties for category 2 inaccuracies are 1.5 times the corresponding penalty for category 1 inaccuracies. The following tables show the maximum and the minimum penalties for each type of inaccuracy falling within category 2 for unprompted or prompted disclosures.

Unprompted disclosure - category 2

Type of inaccuracy Careless Deliberate Deliberate and concealed
       
Maximum penalty 45% 105% 150%
Minimum penalty 0% 30% 45%

It is possible to achieve a reduction to nil for an unprompted disclosure of a careless inaccuracy within category 2.

Prompted disclosure - category 2

For a prompted disclosure of an inaccuracy within category 2, each penalty can be reduced by up to half of the maximum penalty.

Type of inaccuracy Careless Deliberate Deliberate and concealed
       
Maximum penalty 45% 105% 150%
Minimum penalty 22.5% 52.5% 75%

For example

For an unprompted disclosure of a deliberate but not concealed inaccuracy within category 2, the maximum penalty is 105% and the minimum penalty is 30%. The extent of the quality of disclosure reduction, CH82430, gives the point between the maximum 105% and the minimum 30% at which the penalty lies.

FA07/SCH24/PARA10