CH82512 - Penalties for Inaccuracies: Calculating the Penalty: Calculation Process: Prompted disclosure calculation example

You must check the date from which these rules apply for the tax or duty you aredealing with. SeeCH81011for full details.

James has made a prompted disclosure of a careless inaccuracy. The PLR is £12,000.

Step 1

The percentage for the quality of the disclosure (a) has been calculated as 60%.

Step 2

The maximum penalty (b) is 30% and the minimum penalty (c) is 15%.

So the maximum disclosure reduction (d) is 30 – 15 = 15

Step 3

The actual reduction percentage for disclosure (e) is 15 x 60% = 9%

Step 4

Penalty percentage to be charged (f) is 30% – 9% = 21%

Step 5

The penalty to be charged (g) is £12,000 x 21% = £2,520