CH94700 - Penalties for VAT and Excise Wrongdoing: Calculating the penalty: Reducing the penalty: Determining unprompted or prompted disclosure
Whether a disclosure is unprompted or prompted is an objective test. It is not what the person believed but what the particular facts and circumstances gave him reason to believe.
A national campaign highlighting an activity 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 had
- asked them about the activities to which the wrongdoing is related, or
- arranged to visit their premises to explore the risks identified.
It will be exceptional for a disclosure to be unprompted if a compliance check is in progress. It will be unprompted only if the disclosure is about something the assurance officer has not discovered or is not about to discover.
During a compliance check (for example, a VAT or excise assurance visit) if a disclosure 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 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.
A person is only able to disclose something they know is wrong. They may be genuinely unaware that they have done anything wrong.
However if the person has been careless, for example by not taking advice when they should have, then on challenge the disclosure cannot be unprompted.
For practical examples of unprompted or prompted disclosure, see CH94750.