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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Penalties for Inaccuracies: Calculating the Penalty: Calculation Process: Prompted disclosure calculation example

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

James has made a prompted disclosure of a careless inaccuracy. The PLR is £12,000.

Step 1

The percentage for the quality of the disclosure (a) has been calculated as 60%.

Step 2

The maximum penalty (b) is 30% and the minimum penalty (c) is 15%.

So the maximum disclosure reduction (d) is 30 – 15 = 15

Step 3

The actual reduction percentage for disclosure (e) is 15 x 60% = 9%

Step 4

Penalty percentage to be charged (f) is 30% – 9% = 21%

Step 5

The penalty to be charged (g) is £12,000 x 21% = £2,520