Taxes Management Act 1970

[F1 98C Notification under Part 7 of Finance Act 2004 U.K.

(1) A person who fails to comply with any of the provisions of Part 7 of the Finance Act 2004 (disclosure of tax avoidance schemes) mentioned in subsection (2) below shall be liable—

(a) to a penalty not exceeding

[F2 (i) in the case of a provision mentioned in paragraph (a), (b)[F3 , (c) [F4 , (ca) or (cc)]] of that subsection, £600 for each day during the initial period (but see also subsections (2A), (2B) and (2ZC) below), and

(ii) in any other case, £5,000], and

(b) if the failure continues after a penalty is imposed under paragraph (a) above, to a further penalty or penalties not exceeding £600 for each day on which the failure continues after the day on which the penalty under paragraph (a) was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).

(2) Those provisions are—

(a) section 308(1) and (3) (duty of promoter in relation to notifiable proposals and notifiable arrangements),

(b) section 309(1) (duty of person dealing with promoter outside United Kingdom),

(c) section 310 (duty of parties to notifiable arrangements not involving promoter), F5 ...

[F6 (ca) section 310A (duty to provide further information requested by HMRC),]

[F7 (cb) section 310C (duty of promoters to provide updated information),]

[F8 (cc) section 311C (duty to provide further information requested by HMRC: section 311(3) case);]

(d) section [F9 312(2)] (duty of promoter to notify client of reference number)

[F10 (dza) section 312ZA(2) (duty to notify client of reference number: section 311(3) case);]

[F11 (da) section 312A(2) [F12 and (2A)] (duty of client to notify parties of reference number),] F13 ...

[F14 (daa) section 312B (duty of client to provide information to promoter),]

[F15 (db) section 313ZA (duty of promoter to provide details of clients),]

[F16 (dc) section 313ZB (enquiry following disclosure of client details),]

[F17 (dca) section 313ZC (duty of employer to provide details of employees etc),]

[F18 (e) sections 313A and 313B (duty of promoter to respond to inquiry)] F19 ...

[F20 (f) section 313C (duty of introducer to give details of persons who have provided information [F21 or have been provided with information])][F22 , and

(g) section 316A (duty to provide additional information)].

[F23 (2ZA) In this section “the initial period” means the period—

(a) beginning with the relevant day, and

(b) [F24 (subject to subsection (2ZAB))] ending with the earlier of the day on which the penalty under subsection (1)(a)(i) is determined and the last day before the failure ceases;

and for this purpose “the relevant day” is the day specified in relation to the failure in the following table.

Failure	Relevant day
A failure to comply with subsection (1) or (3) of section 308 in so far as the subsection applies by virtue of an order under section 306A	The first day after the end of the period prescribed under section 306A(6)
A failure to comply with subsection (1) or (3) of section 308 in so far as the subsection applies by virtue of an order under section 308A(2)	The first day after the end of the period prescribed under subsections (5) and (6)(a) of section 308A (as it may have been extended by a direction under subsection (6)(b) of that section)
Any other failure to comply with subsection (1) of section 308	The first day after the end of the period prescribed under that subsection
Any other failure to comply with subsection (3) of section 308	The first day after the end of the period prescribed under that subsection
A failure to comply with subsection (1) of section 309	The first day after the end of the period prescribed under that subsection
A failure to comply with section 310	The first day after the latest time by which section 310 must be complied with in the case concerned
[F25 A failure to comply with section 310A	The first day after the end of the period within which the person must comply with section 310A.]
[F26 A failure to comply with section 311C	The first day after the end of the period before the end of which the person must comply with section 311C]

[F27 (2ZAA) Subsection (2ZAB) applies where—

(a) a person fails to comply with a provision mentioned in subsection (2)(a), (b) or (c) in respect of arrangements or proposed arrangements, and

(b) a reference number is subsequently allocated to the arrangements or proposed arrangements in a case within section 311(3) of the Finance Act 2004 (case where notice given under section 310D)).

(2ZAB) Where this subsection applies, the failure to comply is taken for the purposes of this section to have ceased on the day before the reference number is allocated, if it has not already ceased.]

(2ZB) The amount of a penalty under subsection (1)(a)(i) is to be arrived at after taking account of all relevant considerations, including the desirability of its being set at a level which appears appropriate for deterring the person, or other persons, from similar failures to comply on future occasions having regard (in particular)—

(a) in the case of a penalty for a [F28 promoter's] failure to comply with section 308(1) or (3) [F29 or section 310A], to the amount of any fees received, or likely to have been received, by the [F30 promoter] in connection with the notifiable proposal (or arrangements implementing the notifiable proposal), or with the notifiable arrangements,

[F31 (aa) in the case of a penalty for a person's failure to comply with section 311C, to the amount of any fees received, or likely to have been received, by the person in connection with the arrangements, the proposed arrangements or the proposal,] and

(b) in the case of a penalty for a [F32 relevant] person's failure to comply with section 309(1)[F33 , 310 or 310A], to the amount of any advantage gained, or sought to be gained, by the [F34 relevant] person in relation to any tax prescribed under section 306(1)(b) in relation to the notifiable arrangements.

[F35 (2ZBA) In subsection (2ZB)—

(a) “promoter” has the same meaning as in Part 7 of the Finance Act 2004, and

(b) “relevant person” means a person who enters into any transaction forming part of notifiable arrangements within the meaning of that Part.]

(2ZC) If the maximum penalty under subsection (1)(a)(i) above appears inappropriately low after taking account of those considerations, the penalty is to be of such amount not exceeding £1 million as appears appropriate having regard to those considerations.

(2ZD) Where it appears to an officer of Revenue and Customs that a penalty under subsection (1)(a)(i) above has been determined on the basis that the initial period begins with a day later than that which the officer considers to be the relevant day, an officer of Revenue and Customs may commence proceedings for a re-determination of the penalty.

(2ZE) The Treasury may by regulations vary—

(a) any of the sums for the time being specified in subsection (1) above, and

(b) the sum specified in subsection (2ZC) above.]

[F36 (2A) Where a failure to comply with a provision mentioned in subsection (2) concerns a proposal or arrangements in respect of which an order has been made under section 306A of the Finance Act 2004 (doubt as to notifiability), the [F37 amounts specified in subsection (1)(a)(i) and (b) above shall be increased to the prescribed sum in relation to days falling after the prescribed period].

(2B) Where a failure to comply with a provision mentioned in subsection (2) concerns a proposal or arrangements in respect of which an order has been made under section 314A of the Finance Act 2004 (order to disclose), the [F38 amounts specified in subsection (1)(a)(i) and (b)] above shall be increased to the prescribed sum in relation to days falling after the prescribed period.

(2C) In subsection (2A) and (2B)—

(a) “the prescribed sum” means a sum prescribed by the Treasury by regulations, and

(b) “the prescribed period” means a period beginning with the date of the order under section [F39 306A or] 314A and prescribed by the Commissioners by regulations.

(2D) The making of an order under section [F40 306A or] 314A of that Act does not of itself mean that, for the purposes of section 118(2) of this Act, a person either did or did not have a reasonable excuse for non-compliance before the order was made.

(2E) Where an order is made under section [F41 306A or] 314A of that Act then for the purposes of section 118(2) of this Act—

(a) the person identified in the order as the promoter of the proposal or arrangements cannot, in respect of any time after the end of the period mentioned in subsection (2B), rely on doubt as to notifiability as an excuse for failure to comply with section 308 of that Act, and

(b) any delay in compliance with that section after the end of that period is unreasonable unless attributable to something other than doubt as to notifiability.

[F42 (2EA) Where a person fails to comply with—

(a) section 309 of that Act and the promoter for the purposes of that section is a monitored promoter for the purposes of Part 5 of the Finance Act 2014, or

(b) section 310 of that Act and the arrangements for the purposes of that section are arrangements of such a monitored promoter,

then for the purposes of section 118(2) of this Act legal advice which the person took into account is to be disregarded in determining whether the person had a reasonable excuse, if the advice was given or procured by that monitored promoter.

(2EB) In determining for the purpose of section 118(2) of this Act whether or not a person who is a monitored promoter within the meaning of Part 5 of the Finance Act 2014 had a reasonable excuse for a failure to do anything required to be done under a provision mentioned in subsection (2), reliance on legal advice is to be taken automatically not to constitute a reasonable excuse if either—

(a) the advice was not based on a full and accurate description of the facts, or

(b) the conclusions in the advice that the person relied on were unreasonable.]

(2F) Regulations under [F43 this section]—

(a) may include incidental or transitional provision,

(b) shall be made by statutory instrument,

(c) in the case of regulations under subsection [F44 (2ZE) or] (2C)(a), shall not be made unless a draft has been laid before and approved by resolution of the House of Commons, and

(d) in the case of regulations under subsection (2C)(b), shall be subject to annulment in pursuance of a resolution of the House of Commons.]

(3) A person who fails to comply with [F45 subsection (1) of section 313] of the Finance Act 2004 (duties of parties to notifiable arrangements to notify Board of reference number, etc.) [F46 or regulations under subsection (3) of that section] shall be liable to a [F47 penalty not exceeding the relevant sum].

(4) In subsection (3) above “the relevant sum” means—

(a) in relation to a person not falling within paragraph (b) or (c) below, [F48 £5,000] in respect of each scheme to which the failure relates,

(b) in relation to a person who has previously failed to comply with section [F49 subsection (1) of section 313 or regulations under subsection (3) of that section] on one (and only one) occasion during the period of 36 months ending with the date on which the current failure to comply with that provision began, [F50 £7,500] in respect of each scheme to which the current failure relates (whether or not the same as the scheme to which the previous failure relates), or

(c) in relation to a person who has previously failed to comply with section [F49 subsection (1) of section 313 or regulations under subsection (3) of that section] on two or more occasions during the period of 36 months ending with the date on which the current failure to comply with that provision began, [F51 £10,000] in respect of each scheme to which the current failure relates (whether or not the same as the schemes to which any of the previous failures relates).

(5) In subsection (4) above “scheme” means any notifiable arrangements within the meaning of Part 7 of the Finance Act 2004.]

Textual Amendments

F1 S. 98C inserted (22.7.2004 for specified purposes) by Finance Act 2004 (c. 12), ss. 315(1), 319(1)(2) (with s. 314)

F2 Words in s. 98C(1)(a) substituted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(2), 11; S.I. 2010/3019, art. 2

F3 Words in s. 98C(1)(a)(i) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(6)

F4 Words in s. 98C(1)(a)(i) substituted (with application in accordance with Sch. 31 paras. 45, 46 of the amending Act) by Finance Act 2021 (c. 26), Sch. 31 paras. 42(2), 44

F5 Word in s. 98C(2)(c) repealed (19.7.2007) by Finance Act 2007 (c. 11), Sch. 27 Pt. 6(4)

F6 S. 98C(2)(ca) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(7)

F7 S. 98C(2)(cb) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 3

F8 S. 98C(2)(cc) inserted (with application in accordance with Sch. 31 paras. 45, 46 of the amending Act) by Finance Act 2021 (c. 26), Sch. 31 paras. 42(3)(a), 44

F9 Word in s. 98C(2)(d) substituted (1.11.2008 except for the purposes of stamp duty land tax, 1.4.2010 in so far as not already in force) by Finance Act 2008 (c. 9), s. 116(2), Sch. 38 para. 7(2)(a); S.I. 2008/1935, art. 2(1) (with art. 2(2)); S.I. 2010/409, art. 2

F10 S. 98C(2)(dza) inserted (with application in accordance with Sch. 31 paras. 45, 46 of the amending Act) by Finance Act 2021 (c. 26), Sch. 31 paras. 42(3)(b), 44

F11 S. 98C(2)(da) inserted (1.11.2008 except for the purposes of stamp duty land tax, 1.4.2010 in so far as not already in force) by Finance Act 2008 (c. 9), s. 116(2), Sch. 38 para. 7(2)(b); S.I. 2008/1935, art. 2(1) (with art. 2(2)); S.I. 2010/409, art. 2

F12 Words in s. 98C(2)(da) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 8

F13 Word in s. 98C(2)(da) omitted (1.1.2011) by virtue of Finance Act 2010 (c. 13), Sch. 17 paras. 10(3)(a), 11; S.I. 2010/3019, art. 2

F14 S. 98C(2)(daa) inserted (17.7.2013) by Finance Act 2013 (c. 29), s. 223(4)(a)

F15 S. 98C(2)(db) inserted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(3)(b), 11; S.I. 2010/3019, art. 2

F16 S. 98C(2)(dc) inserted (17.7.2013) by Finance Act 2013 (c. 29), s. 223(4)(b)

F17 S. 98C(2)(dca) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 11

F18 S. 98C(2)(e) and preceding word inserted (19.7.2007) by Finance Act 2007 (c. 11), s. 108(9)(a) (with s. 108(10))

F19 Word in s. 98C(2)(e) omitted (26.3.2015) by virtue of Finance Act 2015 (c. 11), Sch. 17 para. 15

F20 S. 98C(2)(f) and preceding word inserted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(3)(c), 11; S.I. 2010/3019, art. 2

F21 Words in s. 98C(2)(f) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 13

F22 S. 98C(2)(g) and preceding word inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 15

F23 S. 98C(2ZA)-(2ZE) inserted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(4), 11; S.I. 2010/3019, art. 2

F24 Words in s. 98C(2ZA)(b) inserted (with application in accordance with Sch. 31 paras. 45, 46 of the amending Act) by Finance Act 2021 (c. 26), Sch. 31 paras. 42(4), 44

F25 Words in s. 98C(2ZA) added (17.7.2014) by Finance Act 2014 (c. 26), s. 284(8)

F26 Words in s. 98C(2ZA) inserted (with application in accordance with Sch. 31 paras. 45, 46 of the amending Act) by Finance Act 2021 (c. 26), Sch. 31 paras. 42(5), 44

F27 S. 98C(2ZAA)(2ZAB) inserted (with application in accordance with Sch. 31 paras. 45, 46 of the amending Act) by Finance Act 2021 (c. 26), Sch. 31 paras. 42(6), 44

F28 Word in s. 98C(2ZB)(a) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(9)(a)(i)

F29 Words in s. 98C(2ZB)(a) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(9)(a)(ii)

F30 Word in s. 98C(2ZB)(a) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(9)(a)(iii)

F31 S. 98C(2ZB)(aa) inserted (with application in accordance with Sch. 31 paras. 45, 46 of the amending Act) by Finance Act 2021 (c. 26), Sch. 31 paras. 42(7), 44

F32 Word in s. 98C(2ZB)(b) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(9)(b)(i)

F33 Words in s. 98C(2ZB)(b) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(9)(b)(ii)

F34 Word in s. 98C(2ZB)(b) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(9)(b)(iii)

F35 S. 98C(2ZBA) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 284(10)

F36 S. 98C(2A)-(2F) inserted (19.7.2007) by Finance Act 2007 (c. 11), s. 108(9)(b) (with s. 108(10))

F37 Words in s. 98C(2A) substituted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(5), 11; S.I. 2010/3019, art. 2

F38 Words in s. 98C(2B) substituted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(6), 11; S.I. 2010/3019, art. 2

F39 Words in s. 98C(2C)(b) inserted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(7), 11; S.I. 2010/3019, art. 2

F40 Words in s. 98C(2D) inserted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(8), 11; S.I. 2010/3019, art. 2

F41 Words in s. 98C(2E) inserted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(9), 11; S.I. 2010/3019, art. 2

F42 S. 98C(2EA)(2EB) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 275 (with ss. 269-271)

F43 Words in s. 98C(2F) substituted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(10)(a), 11; S.I. 2010/3019, art. 2

F44 Words in s. 98C(2F)(c) inserted (1.1.2011) by Finance Act 2010 (c. 13), Sch. 17 paras. 10(10)(b), 11; S.I. 2010/3019, art. 2

F45 Words in s. 98C(3) substituted (1.11.2008 except for the purposes of stamp duty land tax, 1.4.2010 in so far as not already in force) by Finance Act 2008 (c. 9), s. 116(2), Sch. 38 para. 7(3)(a); S.I. 2008/1935, art. 2(1) (with art. 2(2)); S.I. 2010/409, art. 2

F46 Words in s. 98C(3) inserted (1.11.2008 except for the purposes of stamp duty land tax, 1.4.2010 in so far as not already in force) by Finance Act 2008 (c. 9), s. 116(2), Sch. 38 para. 7(3)(b); S.I. 2008/1935, art. 2(1) (with art. 2(2)); S.I. 2010/409, art. 2

F47 Words in s. 98C(3) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 18(a)

F48 Sum in s. 98C(4)(a) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 18(b)(i)

F49 Words in s. 98C(4) substituted (1.11.2008 except for the purposes of stamp duty land tax, 1.4.2010 in so far as not already in force) by Finance Act 2008 (c. 9), s. 116(2), Sch. 38 para. 7(4); S.I. 2008/1935, art. 2(1) (with art. 2(2)); S.I. 2010/409, art. 2

F50 Sum in s. 98C(4)(b) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 18(b)(ii)

F51 Sum in s. 98C(4)(c) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 17 para. 18(b)(iii)