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Disclosure is a key part of the harmonised penalty regime for:

1. Ìý

   •ÌýÌýÌýÌý inaccuracy in a document (see A4.530)

2. Ìý

   •ÌýÌýÌýÌý failure to notify liability (see A4.540) and

3. Ìý

   •ÌýÌýÌýÌý late filing of returns (see A4.550)

In each case, a tax-geared penalty taking the form of a percentage will be reduced if the taxpayer discloses the default (ie the inaccuracy or failure) to HMRC. An unprompted disclosure attracts a greater reduction than one which is prompted. The concepts are prompted and unprompted disclosure is considered below.

There are limits to the reductions that can apply to each of the penalty levels for both prompted and unprompted disclosures. Thus the reduction can never reduce the penalty percentage below a statutory minimum. The minimum penalty percentage in each case is shown in the tables at A4.533 (inaccuracy in a document), A4.541 (failure to notify liability) and A4.555 (late filing of returns). Where the penalty chargeable is higher because the default involves an offshore matter or offshore transfer, the statutory minimum after taking account of disclosure is increased accordingly;