Commentary

V5.360H Sanctions for persistently unco-operative large businesses

Part V5 Compliance, enforcement and appeals

V5.360H Sanctions for persistently unco-operative large businesses

V5.360H Sanctions for persistently unco-operative large businesses

Introduction

FA 2016 s 161 and Schedule 19 Part 3 introduce a regime to combat persistently unco-operative behaviour from large businesses. The regime, which comes into force with effect from 15 September 2016, may be summarised as follows—

A business which persistently engages in uncooperative behaviour which gives rise to a significant tax issue may result in HMRC issuing the business with a warning notice. Subsequent unco-operative behaviour may result in the issuing of a special measures notice, the effect of which is that—

  1.  

    •     an inaccuracy in a document may, for the purposes of FA 2007 Sch 24 (penalties for errors) be regarded as resulting from a failure to take reasonable care (see V5.345); and

  2.  

    •     information relating to the business may be published.

A more detailed description of the provisions is set out below.

Application

The legislation applies to—

  1.  

    •     a UK group, ie two or more companies or other bodies corporate (other than limited liability partnerships) whose head is incorporated in the UK1;

  2.  

    •     a UK company, ie a company formed and registered under CA 2006 other than an open-ended investment company within the meaning of CTA 2010 s 613 or an investment trust within the meaning of CTA 2010 s 11582. The head of a UK group is whichever company or other body corporate within the group is not a 51% subsidiary of another company or other body corporate within the group;

  3.  

    •     a UK sub-group, ie a group that would be

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