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Notification Regulations: Penalties for not sending a notification: When will a penalty apply?

Any penalty will be charged under Regulation 13 of »Ê¹ÚÌåÓýapp International Tax Compliance Regulations 2015 (SI 2015/878), as amended by the International Tax (Client Notification) Regulations 2016.

A Specified Financial Institution or Specified Relevant Person who fails to notify their specified clients will be charged a penalty of £3,000.  »Ê¹ÚÌåÓýapp notification must be sent by 31 August 2017, so if this deadline is not met the penalty will be due.  This is a flat rate penalty, and not charged per client not notified.

When applying either of the general approaches, there is a chance that the sender will notify some people who do not meet the criteria.  It is unlikely a penalty will be due, provided the sender has taken reasonable steps to get it right.

If the person satisfies HMRC that there is a reasonable excuse for the failure they will not be charged the penalty.  Having insufficient funds or having relied on another person are not reasonable excuses.

»Ê¹ÚÌåÓýapp assessment of the penalty must be made by HMRC by notification to the person within a period of 12 months from 1 September 2017.