Commentary

A4.541 Penalties for failure to notify liability—calculation of penalties

Administration and compliance

A4.541 Penalties for failure to notify liability—calculation of penalties

A4.541 Penalties for failure to notify liability—calculation of penalties

The penalty for failure to notify is chargeable where the taxpayer has failed to comply with an obligation to notify (as in A4.540), and tax has been lost to the Exchequer as a result. The penalty is calculated initially as a percentage of the tax lost. It is then subject to potential reductions for disclosure, special circumstances, reasonable excuse and certain other penalties.

A person is not liable to a penalty for a failure in respect of which they have been convicted of an offence1.

Amount of penalty

The amount of the penalty depends on whether or not the failure to notify liability is deliberate and, if so, whether or not it is also concealed, ie whether or not the taxpayer makes arrangements to conceal the situation giving rise to the obligation to notify2. The concepts of deliberate behaviour and concealment are discussed at A4.567A. For each possibility the penalty is as follows3:

Nature of actionMaximum

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