CH122550 - Offshore matters: asset-based penalties: maximum penalty reduction for disclosure
The standard penalty as calculated at CH122500 can be reduced for disclosure and co-operation.
HMRC must reduce the standard amount of the asset-based penalty where a person does all of the following things
- makes a disclosure of the inaccuracy or failure relating to the standard offshore tax penalty,
- provides HMRC with a reasonable valuation of the asset, and
- provides HMRC with information or access to records that HMRC requires for the purposes of valuing the asset.
Any reduction under the above provision must reflect the quality of the disclosure, the valuation and the information provided. 'Quality' includes timing, nature and extent.
The maximum amount of reduction available for disclosure will depend upon whether the case involves prompted or unprompted disclosure, see CH122600.
In a case involving only unprompted disclosure, the maximum amount of reduction permitted is 50% of the standard amount of the asset-based penalty.
Where the disclosure is prompted, the maximum amount of reduction permitted is 20% of the standard amount of the asset based penalty.
Further
guidance on quality of disclosure can be found at CH122575.