Penalties for failure to comply with Regulations
14.—(1) A person who fails to comply with any of the provisions of these Regulations specified in paragraph (2) is liable—
(a)to a penalty not exceeding—
(i)£5,000, or
(ii)in the case of a provision mentioned in sub-paragraph (a), (c), (d) or (f) of that paragraph, if that amount appears to an officer of Revenue and Customs to be inappropriately low after taking into account all relevant considerations, £600 for each day during the initial period, and
(b)if the failure continues after a penalty is imposed under sub-paragraph (a), 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 sub-paragraph (a) was imposed (but excluding any day for which a penalty under this regulation has already been imposed).
(2) The provisions are—
(a)regulation 3(1) (UK intermediary’s obligation to make a return of reportable information),
(b)regulation 3(4) (UK intermediary’s obligation to make a return of new reportable information),
(c)regulation 4(1) (UK relevant taxpayer’s obligation to make a return of reportable information),
(d)regulation 7(2) (UK intermediary’s obligation to notify where legal professional privilege exclusion applies),
(e)regulation 8(2) (intermediary’s obligation to notify arrangement reference number),
(f)regulation 11 (requirement to provide information).
(3) For the purposes of this regulation and regulation 16, “relevant considerations” include—
(a)the desirability of a penalty 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)—
(i)in the case of a penalty for a UK intermediary’s failure to comply with any obligation, to the amount of any fees received, or likely to have been received, by the UK intermediary in connection with the reportable cross-border arrangement, and
(ii)in the case of a penalty for a UK relevant taxpayer’s failure to comply with any obligation, to the amount of any advantage gained, or sought to be gained, by the UK relevant taxpayer in relation to any tax in relation to the reportable cross-border arrangement,
(b)whether the failure giving rise to the penalty was deliberate,
(c)any procedures maintained by the person liable to the penalty to secure the identification of reportable cross-border arrangements and compliance with obligations under these Regulations,
(d)the reasonably foreseeable consequences of the failure.
(4) In this regulation, “the initial period” means the period—
(a)beginning with the relevant day, and
(b)ending on the earlier of—
(i)the day on which the penalty under paragraph (1)(a)(ii) is determined, and
(ii)the last day before the failure ceases.
(5) For the purpose of paragraph (4), “the relevant day” is the day specified in relation to the failure in the following table.
| Failure | Relevant day |
|---|---|
| A failure to comply with regulation 3(1) | The first day after the end of the specified period prescribed in regulation 3(3) |
| A failure to comply with regulation 4(1) | The first day after the end of the specified period prescribed in regulation 4(4) |
| A failure to comply with regulation 7(2) | The day after the day the notification should have been made |
| A failure to comply with regulation 11 | The first day after the latest time by which regulation 11 must be complied with as specified in the notice under that regulation |
(6) A UK relevant taxpayer who fails to comply with regulation 5 (relevant taxpayer’s obligation to make an annual report) is liable to a penalty not exceeding the relevant sum.
(7) In paragraph (6), “the relevant sum” means—
(a)in relation to a UK relevant taxpayer not falling within sub-paragraph (b) or (c), £5,000 in respect of each reportable cross-border arrangement to which the failure relates,
(b)in relation to a UK relevant taxpayer who has previously failed to comply with regulation 5 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, £7,500 in respect of each reportable cross-border arrangement to which the current failure relates (whether or not the same as the reportable cross-border arrangement to which the previous failure relates), or
(c)in relation to a UK relevant taxpayer who has previously failed to comply with regulation 5 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, £10,000 in respect of each reportable cross-border arrangement to which the current failure relates (whether or not the same as the reportable cross-border arrangement to which any of the previous failures relates).