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A fund may be in breach of a reporting fund requirement and a breach may be classed as either a minor breach or a serious breach¹. A minor breach is one for which there is a reasonable excuse, or which is inadvertent and remedied as soon as possible and which is not specified as a serious breach². It is not regarded as a breach if the reporting fund corrects it without HMRC intervention requesting any information relating to a reporting fund requirement, or if the request for information is made after the fund has taken the initiative to correct the minor breach³.

There is serious breach if a breach occurs which is not a minor breach⁴, or if a minor breach becomes a serious breach (see below)⁵ or if one of the following applies⁶:

1. Ìý

   •ÌýÌýÌýÌý the period of account of the reporting fund exceeds 18 months

2. Ìý

   •ÌýÌýÌýÌý the reporting fund has used an accounting practice which is not in accordance with IAS