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HMRC internal manual

Compliance Handbook

Penalties for VAT and Excise Wrongdoing: Calculating the penalty: Reducing the penalty: Telling

Telling includes

  • admitting the wrongdoing
  • disclosing the wrongdoing in full
  • explaining how and why the wrongdoing arose.

What is important are the timing, nature and extent of the telling of the disclosure.

  • The timing is relevant to the period between the wrongdoing and the disclosure.  In situations where the taxpayer has taken a significant period to correct the position (normally around 3 years, or less where the overall disclosure covers a longer period) they may not receive the full reduction.
  • The nature covers why the wrongdoing occurred. The person needs to show a positive approach to telling what has happened not just reacting to questions.
  • The extent is whether everything is disclosed to us. If there is only a partial disclosure then a full reduction will not be due. There is an overlap here with ‘helping’ - a disclosure that makes no reference to the scale of a wrongdoing is not a complete disclosure.

Overall, the telling to you about the disclosure must be positive and as complete as possible.