Penalty reductions for failure to notify

Produced by Tolley in association with

Owner-Managed Businesses

Guidance

Introduction

Under the penalty legislation introduced by FA 2008, Sch 41, where a failure to notify has occurred, the taxpayer is exposed to a penalty.

The rate of the penalty is based on the behaviour of the person and whether the disclosure of an error has been prompted or unprompted. This rate is then applied to the potential lost revenue (PLR), which is the amount of tax outstanding at a particular date. This is discussed in detail in the Penalties for failure to notify guidance note.

The rate of penalty can be reduced if the taxpayer comes forward to inform HMRC about the failure to notify and it can be reduced further by the nature and quality of the information and documentation provided to HMRC. This is known as the quality of disclosure and is discussed in this guidance note.

A penalty for failure to notify can be completely reduced where a taxpayer has a reasonable excuse. See the Reasonable excuse for failure to notify guidance note.

Prompted and unprompted disclosure

The

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Philip Rutherford

Senior Tax Director at Molson Coors Brewing Company

Phil is the Senior Tax Director for Molson Coors' European operations. He has responsibility for both direct and indirect taxes across both EU and non-EU states. Prior to this, Phil was responsible for Molson Coors UK tax affairs covering all major taxes and duties. Phil trained at KPMG LLP, where he worked for 8 years, specialising in tax investigations across both direct and indirect tax.

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