SCHEDULES

SCHEDULE 21Penalties relating to offshore matters and offshore transfers

Amendments to Schedule 41 to the Finance Act 2008 (c. 9)

I45

Schedule 41 to FA 2008 (penalties: failure to notify etc) is amended as follows.

6

I21

Paragraph 12 (reductions for disclosure) is amended as follows.

I22

For sub-paragraph (1) substitute—

1

Paragraph 13 provides for reductions in penalties—

a

under paragraph 1 where P discloses a relevant failure that involves a domestic matter, and

b

under paragraphs 2 to 4 where P discloses a relevant act or failure.

1A

Paragraph 13A provides for reductions in penalties under paragraph 1 where P discloses a relevant failure that involves an offshore matter or an offshore transfer.

1B

Sub-paragraph (2) applies where P discloses—

a

a relevant failure that involves a domestic matter,

b

a non-deliberate relevant failure that involves an offshore matter, or

c

a relevant act or failure giving rise to a penalty under any of paragraphs 2 to 4.

I23

In sub-paragraph (2), for “a” substitute “ the ”.

I5I14

After sub-paragraph (2) insert—

2A

Sub-paragraph (2B) applies where P discloses—

a

a deliberate relevant failure (whether concealed or not) that involves an offshore matter, or

b

a relevant failure that involves an offshore transfer.

2B

P discloses the failure by—

a

telling HMRC about it,

b

giving HMRC reasonable help in quantifying the tax unpaid by reason of it,

c

allowing HMRC access to records for the purpose of checking how much tax is so unpaid, and

d

providing HMRC with additional information.

2C

The Treasury must make regulations setting out what is meant by “additional information” for the purposes of sub-paragraph (2B)(d).

2D

Regulations under sub-paragraph (2C) are to be made by statutory instrument.

2E

An instrument containing regulations under sub-paragraph (2C) is subject to annulment in pursuance of a resolution of the House of Commons.

I25

At the end insert—

5

Paragraph 6A(4) to (5) applies to determine whether a failure involves an offshore matter, an offshore transfer or a domestic matter for the purposes of this paragraph.

6

In this paragraph “relevant failure” means a failure to comply with a relevant obligation.

I67

In paragraph 13 (amount of reduction for disclosure), for the Table in sub-paragraph (3) substitute—

Standard %

Minimum % for prompted disclosure

Minimum % for unprompted disclosure

30%

case A: 10%

case B: 20%

case A: 0%

case B: 10%

70%

35%

20%

100%

50%

30%

I38

After paragraph 13 insert—

13A

1

If a person who would otherwise be liable to a penalty of a percentage shown in column 1 of the Table (a “standard percentage”) has made a disclosure, HMRC must reduce the standard percentage to one that reflects the quality of the disclosure.

2

But the standard percentage may not be reduced to a percentage that is below the minimum shown for it—

a

for a prompted disclosure, in column 2 of the Table, and

b

for an unprompted disclosure, in column 3 of the Table.

3

Where the Table shows a different minimum for case A and case B—

a

the case A minimum applies if HMRC becomes aware of the failure less than 12 months after the time when the tax first becomes unpaid by reason of the failure;

b

otherwise, the case B minimum applies.

Standard %

Minimum % for prompted disclosure

Minimum % for unprompted disclosure

30%

case A: 10%

case B: 20%

case A: 0%

case B: 10%

37.5%

case A: 12.5%

case B: 25%

case A: 0%

case B: 12.5%

45%

case A: 15%

case B: 30%

case A: 0%

case B:15%

60%

case A: 20%

case B: 40%

case A: 0%

case B: 20%

70%

45%

30%

87.5%

53.75%

35%

100%

60%

40%

105%

62.5%

40%

125%

72.5%

50%

140%

80%

50%

150%

85%

55%

200%

110%

70%