SCHEDULES

SCHEDULE 41 U.K. Penalties: failure to notify and certain VAT and excise wrongdoing

Amount of penalty: standard amount U.K.

[F1 6A (1) A failure is in category 1 if— U.K.

(a) it involves a domestic matter, or

(b) it involves an offshore matter and—

(i) the territory in question is a category 1 territory, or

(ii) the tax at stake is a tax other than income tax or capital gains tax.

(2) A failure is in category 2 if—

(a) it involves an offshore matter,

(b) the territory in question is a category 2 territory, and

(c) the tax at stake is income tax or capital gains tax.

(3) A failure is in category 3 if—

(a) it involves an offshore matter,

(b) the territory in question is a category 3 territory, and

(c) the tax at stake is income tax or capital gains tax.

(4) A failure “involves an offshore matter” if it results in a potential loss of revenue that is charged on or by reference to—

(a) income arising from a source in a territory outside the UK,

(b) assets situated or held in a territory outside the UK,

(c) activities carried on wholly or mainly in a territory outside the UK, or

(d) anything having effect as if it were income, assets or activities of a kind described above.

(5) A failure “involves a domestic matter” if it results in a potential loss of revenue that is charged on or by reference to anything not mentioned in sub-paragraph (4)(a) to (d).

(6) If a single failure is in more than one category (each referred to as a “relevant category”)—

(a) it is to be treated for the purposes of this Schedule as if it were separate failures, one in each relevant category according to the matters that it involves, and

(b) the potential lost revenue in respect of each separate failure is taken to be such share of the potential lost revenue in respect of the single failure (see paragraphs 7 and 11) as is just and reasonable.

(7) For the purposes of this Schedule—

(a) paragraph 21A of Schedule 24 to FA 2007 (classification of territories) has effect, but

(b) an order under that paragraph does not apply to relevant obligations that are to be complied with by a date before the date on which the order comes into force.

(8) Regulations under paragraph 21B of Schedule 24 to FA 2007 (location of assets etc) apply for the purposes of paragraph 6A of this Schedule as they apply for the purposes of paragraph 4A of that Schedule.

(9) In this paragraph—

• “assets” has the meaning given in section 21(1) of TCGA 1992, but also includes sterling;

• “UK” means the United Kingdom, including the territorial sea of the United Kingdom.]

Textual Amendments

F1 Sch. 41 paras. 6-6D substituted for Sch. 41 para. 6 (6.4.2011) by Finance Act 2010 (c. 13), s. 35(2), Sch. 10 para. 8; S.I. 2011/975, art. 2(1) (with art. 4)