SCHEDULES
SCHEDULE 21Penalties relating to offshore matters and offshore transfers
Amendments to Schedule 24 to the Finance Act 2007 (c. 11)
1
Schedule 24 to FA 2007 (penalties for errors) is amended as follows.
2
1
Paragraph 9 (reductions for disclosure) is amended as follows.
2
For sub-paragraph (A1) substitute—
A1
Paragraph 10 provides for reductions in penalties—
a
under paragraph 1 where a person discloses an inaccuracy that involves a domestic matter,
b
under paragraph 1A where a person discloses a supply of false information or withholding of information, and
c
under paragraph 2 where a person discloses a failure to disclose an under-assessment.
A2
Paragraph 10A provides for reductions in penalties under paragraph 1 where a person discloses an inaccuracy that involves an offshore matter or an offshore transfer.
A3
Sub-paragraph (1) applies where a person discloses—
a
an inaccuracy that involves a domestic matter,
b
a careless inaccuracy that involves an offshore matter,
c
a supply of false information or withholding of information, or
d
a failure to disclose an under-assessment.
3
In sub-paragraph (1), in the words before paragraph (a), for the words from “an inaccuracy” to “under-assessment” substitute “the matter”.
4
After sub-paragraph (1) insert—
1A
Sub-paragraph (1B) applies where a person discloses—
a
a deliberate inaccuracy (whether concealed or not) that involves an offshore matter, or
b
an inaccuracy that involves an offshore transfer.
1B
A person discloses the inaccuracy by—
a
telling HMRC about it,
b
giving HMRC reasonable help in quantifying the inaccuracy,
c
allowing HMRC access to records for the purpose of ensuring that the inaccuracy is fully corrected, and
d
providing HMRC with additional information.
1C
The Treasury must make regulations setting out what is meant by “additional information” for the purposes of sub-paragraph (1B)(d).
1D
Regulations under sub-paragraph (1C) are to be made by statutory instrument.
1E
An instrument containing regulations under sub-paragraph (1C) is subject to annulment in pursuance of a resolution of the House of Commons.
5
At the end insert—
4
Paragraph 4A(4) to (5) applies to determine whether an inaccuracy involves an offshore matter, an offshore transfer or a domestic matter for the purposes of this paragraph.
3
In paragraph 10 (amount of reduction for disclosure), for the Table in sub-paragraph (2) substitute—
Standard %
Minimum % for prompted disclosure
Minimum % for unprompted disclosure
30%
15%
0%
70%
35%
20%
100%
50%
30%
4
After paragraph 10 insert—
10A
1
If a person who would otherwise be liable to a penalty of a percentage shown in column 1 of the Table (a “standard percentage”) has made a disclosure, HMRC must reduce the standard percentage to one that reflects the quality of the disclosure.
2
But the standard percentage may not be reduced to a percentage that is below the minimum shown for it—
a
in the case of a prompted disclosure, in column 2 of the Table, and
b
in the case of an unprompted disclosure, in column 3 of the Table.
Standard %
Minimum % for prompted disclosure
Minimum % for unprompted disclosure
30%
15%
0%
37.5%
18.75%
0%
45%
22.5%
0%
60%
30%
0%
70%
45%
30%
87.5%
53.75%
35%
100%
60%
40%
105%
62.5%
40%
125%
72.5%
50%
140%
80%
50%
150%
85%
55%
200%
110%
70%
Amendments to Schedule 41 to the Finance Act 2008 (c. 9)
5
Schedule 41 to FA 2008 (penalties: failure to notify etc) is amended as follows.
6
1
Paragraph 12 (reductions for disclosure) is amended as follows.
2
For sub-paragraph (1) substitute—
1
Paragraph 13 provides for reductions in penalties—
a
under paragraph 1 where P discloses a relevant failure that involves a domestic matter, and
b
under paragraphs 2 to 4 where P discloses a relevant act or failure.
1A
Paragraph 13A provides for reductions in penalties under paragraph 1 where P discloses a relevant failure that involves an offshore matter or an offshore transfer.
1B
Sub-paragraph (2) applies where P discloses—
a
a relevant failure that involves a domestic matter,
b
a non-deliberate relevant failure that involves an offshore matter, or
c
a relevant act or failure giving rise to a penalty under any of paragraphs 2 to 4.
3
In sub-paragraph (2), for “a” substitute “the”.
4
After sub-paragraph (2) insert—
2A
Sub-paragraph (2B) applies where P discloses—
a
a deliberate relevant failure (whether concealed or not) that involves an offshore matter, or
b
a relevant failure that involves an offshore transfer.
2B
P discloses the failure by—
a
telling HMRC about it,
b
giving HMRC reasonable help in quantifying the tax unpaid by reason of it,
c
allowing HMRC access to records for the purpose of checking how much tax is so unpaid, and
d
providing HMRC with additional information.
2C
The Treasury must make regulations setting out what is meant by “additional information” for the purposes of sub-paragraph (2B)(d).
2D
Regulations under sub-paragraph (2C) are to be made by statutory instrument.
2E
An instrument containing regulations under sub-paragraph (2C) is subject to annulment in pursuance of a resolution of the House of Commons.
5
At the end insert—
5
Paragraph 6A(4) to (5) applies to determine whether a failure involves an offshore matter, an offshore transfer or a domestic matter for the purposes of this paragraph.
6
In this paragraph “relevant failure” means a failure to comply with a relevant obligation.
7
In paragraph 13 (amount of reduction for disclosure), for the Table in sub-paragraph (3) substitute—
Standard %
Minimum % for prompted disclosure
Minimum % for unprompted disclosure
30%
case A: 10%
case A: 0%
case B: 20%
case B: 10%
70%
35%
20%
100%
50%
30%
8
After paragraph 13 insert—
13A
1
If a person who would otherwise be liable to a penalty of a percentage shown in column 1 of the Table (a “standard percentage”) has made a disclosure, HMRC must reduce the standard percentage to one that reflects the quality of the disclosure.
2
But the standard percentage may not be reduced to a percentage that is below the minimum shown for it—
a
for a prompted disclosure, in column 2 of the Table, and
b
for an unprompted disclosure, in column 3 of the Table.
3
Where the Table shows a different minimum for case A and case B—
a
the case A minimum applies if HMRC becomes aware of the failure less than 12 months after the time when the tax first becomes unpaid by reason of the failure;
b
otherwise, the case B minimum applies.
Standard %
Minimum % for prompted disclosure
Minimum % for unprompted disclosure
30%
case A: 10%
case A: 0%
case B: 20%
case B: 10%
37.5%
case A: 12.5%
case A: 0%
case B: 25%
case B: 12.5%
45%
case A: 15%
case A: 0%
case B: 30%
case B:15%
60%
case A: 20%
case A: 0%
case B: 40%
case B: 20%
70%
45%
30%
87.5%
53.75%
35%
100%
60%
40%
105%
62.5%
40%
125%
72.5%
50%
140%
80%
50%
150%
85%
55%
200%
110%
70%
Amendments to Schedule 55 to the Finance Act 2009 (c.10)
9
Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended as follows
10
1
Paragraph 14 (reductions for disclosure) is amended as follows.
2
At the beginning insert—
A1
In this paragraph, “relevant information” means information which has been withheld by a failure to make a return.
3
In sub-paragraph (1)—
a
after “6(3) or (4)” insert “where P discloses relevant information that involves a domestic matter”;
b
for the words from “information which” to the end substitute “relevant information”.
4
After sub-paragraph (1) insert—
1A
Paragraph 15A provides for reductions in the penalty under paragraph 6(3) or (4) where P discloses relevant information that involves an offshore matter or an offshore transfer.
1B
Sub-paragraph (2) applies where—
a
P is liable to a penalty under paragraph 6(3) or (4) and P discloses relevant information that involves a domestic matter, or
b
P is liable to a penalty under any of the other provisions mentioned in sub-paragraph (1) and P discloses relevant information.
5
After sub-paragraph (2) insert—
2A
Sub-paragraph (2B) applies where P is liable to a penalty under paragraph 6(3) or (4) and P discloses relevant information that involves an offshore matter or an offshore transfer.
2B
P discloses relevant information by—
a
telling HMRC about it,
b
giving HMRC reasonable help in quantifying any tax unpaid by reason of its having been withheld,
c
allowing HMRC access to records for the purpose of checking how much tax is so unpaid, and
d
providing HMRC with additional information.
2C
The Treasury must make regulations setting out what is meant by “additional information” for the purposes of sub-paragraph (2B)(d).
2D
Regulations under sub-paragraph (2C) are to be made by statutory instrument.
2E
An instrument containing regulations under sub-paragraph (2C) is subject to annulment in pursuance of a resolution of the House of Commons.
6
At the end insert—
5
Paragraph 6A(4) to (5) applies to determine whether relevant information involves an offshore matter, an offshore transfer or a domestic matter for the purposes of this paragraph.
11
In paragraph 15 (amount of reduction for disclosure), for the Table in sub-paragraph (2) substitute—
Standard %
Minimum % for prompted disclosure
Minimum % for unprompted disclosure
70%
35%
20%
100%
50%
30%
12
After paragraph 15 insert—
15A
1
If a person who would otherwise be liable to a penalty of a percentage shown in column 1 of the Table (a “standard percentage”) has made a disclosure, HMRC must reduce the standard percentage to one that reflects the quality of the disclosure.
2
But the standard percentage may not be reduced to a percentage that is below the minimum shown for it—
a
in the case of a prompted disclosure, in column 2 of the Table, and
b
in the case of an unprompted disclosure, in column 3 of the Table.
Standard %
Minimum % for prompted disclosure
Minimum % for unprompted disclosure
70%
45%
30%
87.5%
53.75%
35%
100%
60%
40%
105%
62.5%
40%
125%
72.5%
50%
140%
80%
50%
150%
85%
55%
200%
110%
70%
3
But HMRC must not under this paragraph reduce a penalty below £300.