How to Work out a Penalty for Failing to Notify

Finance Act 2008 lays down maximum and minimum penalties for failure to notify. The only reduction of the maximum penalty percentage permitted is a reduction for disclosure. A disclosure can be prompted unprompted.

An unprompted disclosure earns a greater reduction in the penalty than a prompted disclosure.

The penalty cannot be reduced below the statutory minimum unless HMRC agrees to make a special reduction. The statutory minimum depends on the behaviour leading to the failure and:-

  • Whether the failure was prompted or unprompted: and
  • For non-deliberate failures, when the disclosure was made.

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