»Ê¹ÚÌåÓýapp

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To calculate the penalty you need to follow the steps below:

1. Work out the value of the maximum amount of the penalty

For the enabler, this is:

• the Potential Lost Revenue (PLR) used to calculate the underlying penalty (meaning the PLR of the person who carried out the tax evasion or non-compliance),

• or £3,000, 

whichever is greater - see CH124610.

This is Amount A.

2. Calculate the reductions for the quality of disclosure (also referred to as 'telling, helping and giving')

»Ê¹ÚÌåÓýapp quality of disclosure (telling, helping and giving), determines where the penalty will fall within the penalty range shown in CH401282. »Ê¹ÚÌåÓýapp reduction you give will depend on the enabler's assistance. »Ê¹ÚÌåÓýapp ranges are for

• telling up to 30%
• helping up to 40%
• giving access to records - up to 30%.

To work out the quality of disclosure (amount B) you should consider the guidance at CH401282.

3. Decide whether the disclosure was unprompted or prompted

Whether a disclosure was unprompted or prompted determines the minimum penalty percentage that you can charge. This is explained in more detail in CH401283.

»Ê¹ÚÌåÓýapp penalty falls into one of the ranges shown in the tables below depending on whether the disclosure is prompted or unprompted.

Having established the behaviour and whether the disclosure was unprompted or prompted, using the tables below, you need to find the:

• maximum penalty percentage (C) and

• minimum penalty percentage (D).

Reduction for disclosure in all cases except where the enabler penalty relates to an offshore asset move

Disclosure	Range Minimum	Range Maximum
Unprompted	Higher of 10% of the PLR or £1,000	Higher of 100% of the PLR or £3,000
Prompted	Higher of 30% of the PLR or £3,000	Higher of 100% of the PLR or £3,000

Reduction for disclosure where the enabler penalty relates to an offshore asset move

Disclosure	Range Minimum	Range Maximum
Unprompted	Higher of 10% of the PLR or £1,000	Higher of 50% of the PLR  or £3,000
Prompted	Higher of 30% of the PLR or £3,000	Higher of 50% of the PLR  or £3,000

»Ê¹ÚÌåÓýappn calculate the maximum disclosure reduction (E).

(E) = (C) - (D)

4. Work out the penalty percentage rate

»Ê¹ÚÌåÓýapp penalty percentage rate is determined by the penalty range shown in step 3 and the reduction for quality of disclosure percentage.

To work out the penalty percentage rate you need to calculate the actual reduction percentage for disclosure, (F) = (E) x (B) and then

• for all cases, except where the enabler penalty relates to an asset move, calculate the penalty percentage rate (G) = 100% - (F)
• for cases where the enabler penalty relates to asset move calculate the penalty percentage rate (G) = 50% - (F)

5. Work out the amount of the penalty

To work out the amount of the penalty, we multiply the PLR by the penalty percentage rate.

Penalty amount = (Amount A) x (G)%

»Ê¹ÚÌåÓýapp minimum penalty (before taking into account any adjustments or reductions) is either £1,000 for unprompted and £3,000 for prompted disclosure. If the penalty calculated is less than the minimum amount the penalty due will be the minimum amount.

6. Consider special reductions

After working out the amount of the penalty you should take into account any special circumstances that the enabler has told you about. »Ê¹ÚÌåÓýappse will be uncommon or exceptional circumstances that you have not already considered when working out the quality of disclosure, see CH124600.

Once special reductions are considered, this will give you the amount of penalty that you will charge.

Example

A prompted disclosure, where the quality and timing of the disclosure had been minimal.

»Ê¹ÚÌåÓýapp penalty range for a prompted disclosure is 30% to 100% of the PLR.

»Ê¹ÚÌåÓýapp reduction for quality of disclosure (telling, helping and giving) was 7%.

Step 1 - maximum amount due

»Ê¹ÚÌåÓýapp PLR is £5,255,700 (amount A).

Step 2 - quality of disclosure

»Ê¹ÚÌåÓýapp percentage for the quality of the disclosure (b) has been calculated as 7%.

Step 3 - »Ê¹ÚÌåÓýapp maximum penalty percentage (c) is 100% and the minimum penalty percentage (d) is 30%.

So the maximum disclosure reduction (e) is 100 � 30 = 70%.

Step 4 -

»Ê¹ÚÌåÓýapp actual reduction percentage for disclosure (f) is 70 x 7% = 4.9% (say 5%).

»Ê¹ÚÌåÓýapp Penalty percentage rate to be charged (g) is 100% â€� 5% = 95%.

Step 5 -

»Ê¹ÚÌåÓýapp penalty to be charged is £5,255,700 x 95% = £4,992,915.

Step 6 -

In this example there are no special circumstances to take into account.