CH124640 - Offshore matters: penalties for enablers of offshore tax evasion or non-compliance: calculating the penalty: calculating the offshore enabler penalty - quality of disclosure determining if prompted or unprompted for penalty reduction

Reductions for disclosure

The penalty may be reduced depending on the

• quality of the disclosure, see CH403203,
• if the disclosure was prompted or unprompted, see CH403202, and
• if a special reduction is due, see CH403255.

The reduction may not reduce the penalty below the minimum amount except if a special reduction is applicable.

Unprompted disclosure

The minimum penalty is the greater of

• 10% of the potential lost revenue, or
• £1,000.

Prompted disclosure

The minimum penalty is the greater of

• 30% of the potential lost revenue, or
• £3,000.

A disclosure by an enabler can only be unprompted if it is made at a time when that enabler had no reason to believe that HMRC have discovered or was about to discover the offshore tax evasion committed by another person or their enabling of this activity. The timing of the disclosure relates to the original evasion or non-compliance.

If an enabler tells HMRC about evasion or non-compliance committed by another person that they had enabled, but only makes this disclosure when they had reason to believe that HMRC had discovered the original evasion or non-compliance or were about to discover it, then this is considered to be a prompted disclosure.

A disclosure would not be unprompted if the enabler is aware that an officer of HMRC had discovered an inaccuracy, underassessment, supply of false information or had opened a compliance check.

The particular facts and circumstances of any disclosure are the basis of the test, not the belief that it was either prompted or unprompted. HMRC officers must apply a common-sense approach in deciding whether or not a disclosure is unprompted.