The following Owner-Managed Businesses guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:
Under thepenalty legislation introduced by FA 2008, Sch 41, where a failure to notify has occurred, thetaxpayer is exposed to a penalty.
The rate of thepenalty is based on thebehaviour of theperson and whether thedisclosure of an error has been prompted or unprompted. This rate is then applied to thepotential lost revenue (PLR), which is theamount of tax outstanding at a particular date. This is discussed in detail in thePenalties for failure to notify guidance note.
The rate of penalty can be reduced if thetaxpayer comes forward to inform HMRC about thefailure to notify and it can be reduced further by thenature and quality of theinformation and documentation provided to HMRC. This is known as thequality of disclosure and is discussed in this guidance note.
A penalty for failure to notify can be completely reduced where a taxpayer has a reasonable excuse. See theReasonable excuse for failure to notify guidance note.
The first thing to consider is whether thedisclosure is:
unprompted, ie a voluntary disclosure of a failure to notify HMRC of a chargeability to tax, or
prompted, ie on theback of a HMRC challenge or fear of HMRC discovery of a failure to notify
A disclosure must fall into one of these categories. There is both a smaller range of potential penalties and a lower highest possible penalty for voluntary disclosures. This is designed to encourage disclosure and compliance.
See theTable ― penalty for failure to notify chargeability to tax.
The penalties are higher thelonger thefailure goes on. In cases where themaximum penalty is 30% (in thecase of non-deliberate failures), if thedisclosure is made less than 12 months after any tax due becomes unpaid, thestatutory minimum is increased.
Therefore, therange of penalties for a non-deliberate failure is 0–30% for an unprompted disclosure and 10–30% for a
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
Liability of the personal representativesAfter a person’s death, the property of the deceased is vested in the personal representatives (PRs) to enable them to manage and distribute the estate in accordance with the Will or the terms of intestacy. See the Personal representatives guidance note.The
OutlineWhen a property investor grants a lease, potentially this could be done on the basis that the tenant pays a premium for the initial grant of the lease, in addition to also paying rent over the term of the lease. In the absence of specific legislation to the contrary, such premiums would all
This guidance note explains the general rules surrounding the availability of indexation allowance on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview of the general position regarding company disposals, please refer to
Trust property, which is the subject of a qualifying interest in possession (QIIP), may become chargeable to inheritance tax on the following occasions:•on the death of the beneficiary with the interest in possession•on the death of the beneficiary within seven years after a transfer or lifetime