CH82421 - Penalties for Inaccuracies: Calculating the Penalty: Penalty reductions for quality of disclosure: Determining unprompted or prompted disclosure

You must check the date from which these rules apply for the tax or duty you are dealing with. See CH81011 for full details.

Whether a disclosure is unprompted or prompted is an objective test.

The particular facts and circumstances of the disclosure are the basis of the test, not the belief that it was either unprompted or prompted.

A national campaign highlighting an area of the trading community on which HMRC will be concentrating would not stop a disclosure from being unprompted. However a disclosure would be prompted if a person made the disclosure after

  • we contacted them to tell them we wished to make a compliance check of their return
  • we arranged to visit their premises to explore the risks we had identified, or
  • we told them that we had asked the Valuation Office Agency to consider the value of a property included in an inheritance tax account, or
  • HMRC has been supplied with information, under an automatic exchange of information agreement that would, when reviewed, lead to the discovery of the issue being disclosed. This would not apply where the person had no reason to believe that the information had been supplied to HMRC

It will be exceptional for a disclosure to be unprompted if a compliance check is in progress. The disclosure will be unprompted only if it is about something the compliance officer has not discovered or is not about to discover.

A disclosure may be made during the course of a compliance check. If it is related to the subject matter being reviewed then it will be considered to be a related disclosure and therefore prompted.

Some companies will be in continuous dialogue to share a Risk Profile with HMRC. A disclosure can be unprompted if it relates to an

  • an area of risk identified by the company, or
  • an area identified as part of risk profile discussions that is not yet the subject of a specific enquiry.

For guidance on correction to VAT returns, see CH81141.

A person is only able to disclose something they know is wrong. They may be genuinely unaware that they have done anything wrong. However, a disclosure made after we challenge a particular issue cannot be unprompted.

An unprompted disclosure can be made for both inaccuracies and under-assessments.

For practical examples of unprompted or prompted disclosure, see CH82422.