Deliberate defaulters and offshore penalties: CC/FS13, CC/FS14, CC/FS17

HMRC's factsheet CC/FS13 says it contains information about when HMRC may publish the details of people who deliberately get their tax affairs wrong, whom it calls 'deliberate defaulters'.

“This factsheet contains information about when we may publish the details of people who deliberately get their tax affairs wrong. … some people deliberately get their tax affairs wrong. We call these people ‘deliberate defaulters’.”

HMRC's factsheet CC/FS13 says HMRC may publish a person's details if the answer to all 5 of its publication questions is yes.

“If the answer to all 5 publication questions is ‘yes’, we may publish your details.”

HMRC's factsheet CC/FS13 says the rules apply where a return or document containing the inaccuracy relates to a period starting on or after 1 April 2010, or the failure to notify or VAT or Excise wrongdoing occurred on or after 1 April 2010.

“return or document containing the inaccuracy must relate to a period starting on or after 1 April 2010 … failure to notify, or the VAT or Excise wrongdoing must have occurred on or after 1 April 2010”

HMRC's factsheet CC/FS13 says a qualifying relevant penalty is a relevant penalty on which you have not been given the maximum penalty reduction.

“A qualifying relevant penalty is a relevant penalty on which you’ve not been given the maximum penalty reduction.”

HMRC's factsheet CC/FS13 lists as one of its publication questions whether the total qualifying potential lost revenue for all qualifying relevant penalties exceeds £25,000.

“Does the total qualifying potential lost revenue for all qualifying relevant penalties exceed £25,000?”

HMRC's factsheet CC/FS13 says that if you have no reason to believe HMRC has discovered or is about to discover your non-compliance and you tell HMRC you are a deliberate defaulter, HMRC cannot publish your details if it decides it need not start a check, or finds you had already told it everything it needed to know.

“and you tell us that you’re a deliberate defaulter (this is called ‘making an unprompted disclosure’), we cannot publish your details if either of the following applies: … we decide that we do not need to start a check because we accept what you’ve told us … we decide to start a check and find that you had already told us everything we needed to know and that it was correct”

HMRC's factsheet CC/FS13 says that after a check has started a deliberate defaulter may still be able to avoid publication by telling HMRC everything about what they deliberately did wrong as soon as HMRC says a check has started, and by assisting throughout the check.

“you may still be able to avoid having your details published if you: … tell us everything you know about what you deliberately did wrong as soon as we tell you that we’ve started a compliance check … assist us throughout our check by giving us access to your records and helping us work out the right amount of tax liability”

HMRC's factsheet CC/FS13 says that if HMRC gives you the maximum penalty reduction it cannot publish your details, but that if the default involves offshore matters or offshore transfers you may not be able to avoid publication unless you made an unprompted disclosure.

“If we give you the maximum penalty reduction, we cannot publish your details. … However, if your default involves offshore matters or offshore transfers, then you may not be able to avoid publication unless you made an unprompted disclosure.”

HMRC's factsheet CC/FS13 says you may be able to appeal against these decisions within 30 days of the date of the decisions, and that HMRC asks whether you think there are any reasons not to publish the details and normally gives you 30 days to reply.

“you may be able to appeal against these decisions within … 30 days of the date of the decisions. … They’ll also ask you whether you think there are any reasons why we should not publish those details. Normally you’ll have … 30 days to reply.”

HMRC's factsheet CC/FS13 lists what it can publish, including your name, your address (business or private), the amount of the penalties charged, the additional tax those penalties are based on, the nature of your business and the periods over which tax was evaded.

“We can publish: … your name … your address (business or private) … the amount of the penalties we have charged you … the additional tax that those penalties are based on … the nature of your business if you have one … the periods over which you’ve evaded tax”

HMRC's factsheet CC/FS13 says details are published online and will remain there for up to 12 months from the date they are first published.

“We’ll publish your details online … Your details will remain online for up to 12 months from the date we first publish them.”

HMRC's factsheet CC/FS13 says that if you have health or personal circumstances that may make it difficult to deal with HMRC, you can tell the officer who contacted you, and HMRC will help in whatever way it can.

“If you have any health or personal circumstances that may make it difficult for you to deal with us, please tell the officer that’s contacted you. We’ll help you in whatever way we can.”

HMRC's factsheet CC/FS14 says it contains information about the Managing Serious Defaulters (MSD) programme and when HMRC may monitor the tax affairs of people who deliberately get them wrong.

“This factsheet contains information about the Managing Serious Defaulters (MSD) programme and when we may monitor the tax affairs of people who deliberately get them wrong.”

HMRC's factsheet CC/FS14 says the programme is for customers HMRC finds to be deliberately non-compliant in their tax affairs.

“The Managing Serious Defaulters (MSD) programme is for customers we find to be deliberately non-compliant in their tax affairs.”

HMRC's factsheet CC/FS14 lists situations in which HMRC considers you deliberately non-compliant, including being charged a penalty because of your deliberate behaviour, being successfully prosecuted for a tax matter, or being charged a Civil Evasion penalty for dishonesty.

“We consider that you’re deliberately non-compliant if: … we charge you a penalty because of your deliberate behaviour … you are successfully prosecuted by the Director of Revenue and Customs Prosecutions, or another prosecuting authority, for a tax matter … we charge you a Civil Evasion penalty for dishonesty”

HMRC's factsheet CC/FS14 says that once you are on the programme HMRC closely monitors all aspects of your tax affairs for a minimum period of between 1 and 5 years depending on your circumstances.

“Once we place you on the programme, we closely monitor all aspects of your tax affairs. Your tax affairs are monitored for a minimum period of between 1 and 5 years depending on your circumstances.”

HMRC's factsheet CC/FS14 says that if HMRC is satisfied it no longer needs to closely monitor your tax affairs, it will tell you in writing.

“If we are satisfied that we no longer need to closely monitor your tax affairs, we’ll tell you this in writing.”

HMRC's factsheet CC/FS14 lists what you must do as part of the programme, including filling in a full tax return rather than a 'short' one, making sure all returns are accurate and on time, and making all payments and registrations on time.

“As part of the programme you must: … fill in a full tax return, not a ‘short’ one … make sure all your tax returns are accurate and submitted on time … make all payments to us on time … make any registrations on time”

HMRC's factsheet CC/FS14 says monitoring may include announced or unannounced inspection visits to check business records or assets, or a rigorous compliance check into all or any part of your tax affairs.

“making announced or unannounced inspection visits to check your business records or assets relating to your current accounting period … carrying out a rigorous compliance check into all or any part of your tax affairs”

HMRC's factsheet CC/FS14 says it may charge additional penalties or take criminal proceedings if it finds you have continued to deliberately or dishonestly get things wrong, or that you get out of paying what you owe.

“We may charge you additional penalties or take criminal proceedings against you if we find either of the following: … you have continued to deliberately or dishonestly get things wrong … you get out of paying what you owe”

HMRC's factsheet CC/FS14 says you can ask someone else, such as a professional adviser, friend or relative, to deal with HMRC on your behalf.

“You can also ask someone else to deal with us on your behalf. For example, a professional adviser, friend or relative.”

HMRC's factsheet CC/FS17 says it contains information about penalties HMRC may charge for tax non-compliance involving 'offshore matters' or 'offshore transfers', which it refers to as 'offshore non compliance'.

“This factsheet contains information about penalties we may charge for tax non-compliance which involves ‘offshore matters’ or ‘offshore transfers’. These terms are referred to as ‘offshore non compliance’.”

HMRC's factsheet CC/FS17 says these penalties may apply when there is offshore non-compliance relating to Income Tax, Capital Gains Tax or Inheritance Tax that involves an inaccuracy, a failure to notify or deliberately withholding information.

“These penalties may apply when there is offshore non-compliance in relation to Income Tax, Capital Gains Tax or Inheritance Tax which involves either: … an inaccuracy … a failure to notify … deliberately withholding information”

HMRC's factsheet CC/FS17 says territories are divided into 3 categories based on how willing the territory is to share information with the UK, with a maximum penalty of 100% of the tax for category 1, 150% for category 2 and 200% for category 3.

“Territories are divided into 3 categories, based on how willing the territory is to share information with the UK. … Category 1 … The maximum penalty is 100% of the tax. … Category 2 … The maximum penalty is 150% of the tax. … Category 3 … The maximum penalty is 200% of the tax.”

HMRC's factsheet CC/FS17 gives category 1 inaccuracy penalty ranges as careless 0% to 30% (unprompted) and 15% to 30% (prompted), deliberate 30% to 70% and 45% to 70%, and deliberate and concealed 40% to 100% and 60% to 100%, with lower minimums before 1 April 2016 or 6 April 2016.

“Careless | Deliberate | Deliberate and concealed | … 1 Unprompted | 0% to 30% | 30% (20% before 1 April 2016 or 6 April 2016) to 70% | 40% (30% before 1 April 2016 or 6 April 2016) to 100% | … 1 Prompted | 15% to 30% | 45% (35% before 1 April 2016 or 6 April 2016) to 70% | 60% (50% before 1 April 2016 or 6 April 2016) to 100% |”

HMRC's factsheet CC/FS17 gives category 2 inaccuracy penalty ranges as careless 0% to 45% (unprompted) and 22.5% to 45% (prompted), deliberate 40% to 105% and 62.5% to 105%, and deliberate and concealed 55% to 150% and 85% to 150%, with lower minimums before 1 April 2016 or 6 April 2016.

“2 Unprompted | 0% to 45% | 40% (30% before 1 April 2016 or 6 April 2016) to 105% | 55% (45% before 1 April 2016 or 6 April 2016) to 150% | … 2 Prompted | 22.5% to 45% | 62.5% (52.5% before 1 April 2016 or 6 April 2016) to 105% | 85% (75% before 1 April 2016 or 6 April 2016) to 150% |”

HMRC's factsheet CC/FS17 gives category 3 inaccuracy penalty ranges as careless 0% to 60% (unprompted) and 30% to 60% (prompted), deliberate 50% to 140% and 80% to 140%, and deliberate and concealed 70% to 200% and 110% to 200%, with lower minimums before 1 April 2016 or 6 April 2016.

“3 Unprompted | 0% to 60% | 50% (40% before 1 April 2016 or 6 April 2016) to 140% | 70% (60% before 1 April 2016 or 6 April 2016) to 200% | … 3 Prompted | 30% to 60% | 80% (70% before 1 April 2016 or 6 April 2016) to 140% | 110% (100% before 1 April 2016 or 6 April 2016) to 200% |”

HMRC's factsheet CC/FS17 says that for the tax year 2016 to 2017 and later tax years, the minimum penalty for deliberate and for deliberate and concealed behaviour increases by 10%, for both prompted and unprompted disclosures in all categories of territory.

“For the tax year 2016 to 2017 and later tax years, the minimum penalty for ‘deliberate’ and ‘deliberate and concealed’ increases by 10%. This increase applies to both prompted and unprompted disclosures in all categories of territory.”

HMRC's factsheet CC/FS17 says that penalties for failing to make a disclosure under the Requirement to Correct (RTC) are called FTC penalties, and that the standard 200% penalty can be reduced to a minimum of 100% for a voluntary disclosure or 150% where the disclosure is not voluntary.

“Penalties for failing to make a disclosure under RTC legislation are called FTC penalties. … The standard 200% penalty can be reduced by the quality of the disclosure to a minimum of 100% when the disclosure is voluntary or to a minimum of 150% where the disclosure is not voluntary.”

HMRC's factsheet CC/FS17 says offshore non-compliance will not attract FTC penalties if, by 30 September 2018, you had disclosed it to HMRC in line with the RTC or HMRC already held the relevant information.

“Offshore non-compliance will not attract FTC penalties if, by 30 September 2018, either: … you had disclosed it to HMRC in line with the RTC … HMRC already held the relevant information”

HMRC's factsheet CC/FS17 describes the offshore asset moves penalty as a separate penalty for moving assets between territories to avoid or delay discovery of non-compliance, charged at 50% of the underlying penalty in addition to it.

“The offshore asset moves penalty is a separate penalty charged for moving assets between territories to avoid or delay the discovery of tax non-compliance. … The offshore asset move penalty is 50% of the amount of the underlying penalty and is charged in addition to the underlying penalty.”

HMRC's factsheet CC/FS17 says an asset-based penalty may apply where the potential tax at stake exceeds £25,000 in a single year, and that the standard amount is the lower of 10% of the value of the asset and 10 times the offshore tax at stake.

“the potential amount of tax at stake relating to the offshore matter exceeds £25,000 in a single year and … The standard amount of the asset-based penalty is the lower of: … 10% of the value of the asset … 10 x the offshore tax at stake”

HMRC's factsheet CC/FS17 says that if you have health or personal circumstances that may make it difficult to deal with HMRC, you can tell the officer who contacted you, and HMRC will help in whatever way it can.

“If you have any health or personal circumstances that may make it difficult for you to deal with us, tell the officer that has contacted you. We’ll help you in whatever way we can.”

HMRC's factsheet CC/FS17a says it contains detailed information about the enabler penalty HMRC may charge a person who enabled another person to carry out offshore tax evasion or non-compliance.

“This factsheet contains detailed information about the enabler penalty that we may charge a person who enabled another person to carry out offshore tax evasion or non-compliance.”

HMRC's factsheet CC/FS17a says you may be liable to an enabler penalty if you have encouraged, assisted or otherwise facilitated another person in carrying out offshore tax evasion or non-compliance and both conditions A and B are met.

“You may be liable to an enabler penalty if you‘ve encouraged, assisted or otherwise facilitated another person in carrying out offshore tax evasion or non-compliance and both conditions A and B are met.”

HMRC's factsheet CC/FS17a says condition A is met if you knew your actions enabled, or were likely to enable, another person to carry out offshore tax evasion or non-compliance, and condition B is met if that person has a final conviction for a relevant offence or is liable to a relevant penalty that is final.

“Condition A is met if you knew that your actions enabled, or were likely to enable, another person to carry out offshore tax evasion or non-compliance. … has been convicted of a relevant offence and the conviction is final … is liable to a relevant penalty and the penalty is final”

HMRC's factsheet CC/FS17a says the maximum enabler penalty, other than for an offshore asset move, is the higher of 100% of the PLR or £3,000.

“The maximum penalty is the higher of either: … 100% of the PLR … It will be either £3,000 or the relevant percentage of the PLR (50% or 100%) if this is higher than £3,000.”

HMRC's factsheet CC/FS17a says the maximum penalty for an enabler of an offshore asset move is the higher of 50% of the PLR or £3,000, and that an enabler may be charged both a standard penalty and a separate offshore asset move penalty.

“The maximum penalty for an enabler of an offshore asset move is the higher of either: … 50% of the PLR … It will be either £3,000 or the relevant percentage of the PLR (50% or 100%) if this is higher than £3,000. … an enabler may be charged both types of penalty shown above.”

HMRC's factsheet CC/FS17a explains that telling HMRC about the offshore activity before you have reason to believe HMRC has discovered, or is about to discover, the evasion you enabled is an unprompted disclosure, and any other time is a prompted disclosure.

“If you tell us about the offshore activity before you have any reason to believe that we’ve discovered, … or are about to discover the offshore tax evasion that you’ve enabled, we call this an ‘unprompted disclosure’. If you tell us about this activity at any other time, we call it a ‘prompted disclosure’.”

HMRC's factsheet CC/FS17a gives the penalty range for disclosure, in cases other than an offshore asset move, as a minimum of the higher of 10% of the PLR or £1,000 (unprompted) or the higher of 30% of the PLR or £3,000 (prompted), up to the higher of 100% of the PLR or £3,000.

“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 |”

HMRC's factsheet CC/FS17a gives the penalty range for disclosure where the enabler penalty relates to an offshore asset move as the same minimums but a maximum of the higher of 50% of the PLR or £3,000.

“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 |”

HMRC's factsheet CC/FS17a says the reduction for the quality of disclosure depends on how much assistance you give, with up to 30% for telling, up to 40% for helping and up to 30% for giving access to records.

“The reduction we give depends on how much assistance you … telling, we give up to 30% … helping, we give up to 40% … giving access to records, we give up to 30%”

HMRC's factsheet CC/FS17a says that where HMRC makes a decision you can appeal against, you will usually have 3 options within 30 days: send new information, have the case reviewed by an HMRC officer not involved in it, or have an independent tribunal hear the appeal.

“You’ll usually have 3 options. Within 30 days you can: … send new information to the officer you’ve been dealing with and ask them to take it into account … have your case reviewed by an HMRC officer who has not been involved in the matter … arrange for your appeal to be heard by an independent tribunal, who’ll decide the matter”

HMRC's factsheet CC/FS17a says you can ask someone else, such as a professional adviser, friend or relative, to deal with HMRC on your behalf.

“You can also ask someone else to deal with us on your behalf, for example, a professional adviser, friend or relative.”