SM03300 - Special Measures: Behaviours: Reasonable likelihood of further instances
When considering Special Measures, HMRC assesses whether unco-operative behaviour is likely to continue. This is HMRC’s judgement based on the large business’s history, it is not a certainty and reflects what may plausibly occur.
A likelihood of disagreement means it was probable at the time HMRC calculates a potential liability, even if it does not materialise. HMRC bases this forward-looking judgement on past behaviour and evidence gathered over time, or on current risks identified during compliance activity.
Example – Reasonable likelihood of further instances of unco-operative behaviour
A large business has been unco-operative over several years during multiple HMRC enquiries. Despite HMRC’s support and repeated attempts to address the behaviour, issues persist. The business has repeatedly omitted key information from required documentation, hindering HMRC’s ability to carry out its functions. Numerous discussions aimed at improving compliance have failed.
Based on this history, HMRC concludes there is a reasonable likelihood the business will remain unco-operative and issues a Warning Notice (SM04200) advising that the business may be placed into Special Measures within 12 months if the unco-operative behaviour persists.
For information on when representations can be made, please see SM07210
FA2016/SCH19/PT3/PARA35(c)
FA2016/SCH19/PT3/PARA37(2)