IFM41340 - Administrative requirements: non-deliberate breach of activity condition

FA2022/SCH2/PARAS 26, 27(1)(2) and 29(3)

Guidance on whether a breach of the activity condition will be regarded as deliberate is at IFM40430.

When a QAHC discovers that there has been a non-deliberate breach of the activity condition, it must give a notification of the breach under PARA 26 to HMRC.

However, if the QAHC takes steps to cure the breach as soon as reasonably practicable or if the breach has already been cured by the time it was discovered, the breach will be treated as retrospectively cured and for the purposes of FA2022/SCH2 the breach will be treated as if it had never occurred.

As mentioned in IFM40430, there is no specified cure period as with a breach of the ownership condition, but the breach must be capable of cure and be cured ‘as soon as reasonably practicable’ after QAHC became aware of the breach.

If, on the other hand, the breach cannot be cured, or if the QAHC chooses not to try to cure the breach in a cure period, the company will leave the QAHC regime on the date the QAHC became aware of the breach.