CH401292 - Charging penalties: introduction: offshore matters: requirement to correct: failure to correct penalty

If a customer fails to correct their position by 30 September 2018 (or the extended deadline mentioned at CH123200) they are liable to a failure to correct penalty (FTC).

The standard FTC Penalty is 200% of the tax liability that should have been corrected.

The penalty can be reduced if a disclosure is made and you should determine:

• the quality of disclosure (see CH401293 disclosure page), and
• whether it was a voluntary or non-voluntary disclosure.

The penalty cannot be reduced to an amount lower than 100% of the tax liability or 150% if the disclosure is non-voluntary, unless there are special circumstance see CH123350

In addition to the standard FTC penalty of 200% the person may also be liable to an additional:

• Asset- based penalty of up to 10% of the value of the asset - see CH401270
• Offshore Asset Moves penalty equivalent to 50% of the standard FTC penalty if the assets or funds have been moved in an attempt to prevent or delay HMRC discovering the loss of tax, see CH119000.

Reasonable excuse

We will not charge a failure to correct penalty where HMRC are satisfied that there is a reasonable excuse for the failure see CH123300