SDLTM86610 - Compliance: Penalties

Contract settlements and abatement: Disclosure

Disclosure means

• a disclosure of irregularities
• an admission that the land transaction return or documents have been wrong

whether or not the purchaser is able to quantify the irregularities at the time the disclosure is made.

A complete disclosure will in some cases need to include a description of the manner in which the irregularities have been effected.

Disclosure implies

• positive
• voluntary
• useful contributions to your knowledge of the irregularities

Thus a statement which may constitute a disclosure at an early stage in the enquiry (for example, assisting with the quantification of the irregularities or the establishment of culpability) may, if made at a late stage in the enquiry, be no more than confirmation of what has already been irrefutably established.

Disclosure does not, in this context, mean a disclosure of assets in the course of calculating the omissions. Disclosure or non-disclosure of assets and the production of information and documents in response to the enquiries should be regarded as elements in arriving at the abatement for co-operation. See SDLTM86630.

Circumstances will range from the extremes where there is

• a complete and voluntary disclosure, made spontaneously by a purchaser who has not been challenged and who has no reason to fear early discovery (when an extra 10 per cent should be given), see SDLTM86620 to
• no admission of irregularities even though the Commissioners have determined appeals against discovery assessments and Revenue amendments in HM Revenue & Customs favour (when no abatement for disclosure should be given)

Between these extremes there will be a variety of circumstances calling for differing degrees of abatements including the following

• a voluntary and complete disclosure by a purchaser who has some reason to suspect early discovery
• full disclosure on challenge
• a voluntary disclosure which turns out to be partial
• partial disclosure on challenge
• denial of irregularities on challenge, but disclosures subsequently made

The list is not comprehensive and the compliance caseworker should take into account any other aggravating or mitigating circumstances.

If there are no other relevant factors, it may be appropriate to allow 20 per cent for a case within the first two categories and 5 per cent if the disclosure is very belated under the final category and something in between for the middle categories.