Penalties for VAT and Excise Wrongdoing: Calculating the penalty: Reducing the penalty: Telling
- 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. Where a person has taken a significant period to correct their non-compliance in relation to either an onshore or offshore matter, or they would previously have been able to make a disclosure through one of HMRC’s offshore disclosure facilities, they can no longer expect HMRC to give them the full reduction for the quality of disclosure. A ‘significant period‘ is normally considered to be over 3 years but may be less where the overall disclosure covers a longer period.
If you consider that this may apply to your case, see CH95110 for further guidance.
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.