IEIM405100 - Compliance: Penalties
Compliance: Penalties
The International Tax Compliance Regulations 2015 set out the penalties that will be applicable where a Reporting Financial Institution fails to comply with the due diligence, record-keeping, reporting, notification and registration obligations set out in the regulations.
Penalties are not applied automatically. In all cases, HMRC will seek to understand the facts and circumstances leading to the failure to establish whether or not there is a reasonable excuse for the failure. If there is a reasonable excuse, no penalty will be charged. In any other case, HMRC will consider whether any mitigation of the penalty is appropriate [see IEIM405130].
The revised penalty framework introduced by The International Tax Compliance (Amendment) Regulations 2025 applies to failures occurring on or after 16 July 2025, the date that these regulations came into force.
Example:
A Reporting Financial Institution makes a return for the calendar year 2024 on 29 May 2025. The return is subject to a compliance check and HMRC discovers due diligence and reporting failures. The Reporting Financial Institution remediates the deficiencies and submits an amended return for calendar year 2024 on 4 September 2025. Although the amended return is received after 16 July 2025, the due diligence and reporting failures occurred before that date. The previous penalty framework will therefore apply.