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Is 150% the correct penalty?

Prompted disclosure for overseas income, HMRC say minimum penalty is 150% Are they correct?

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Prompted disclosure for overseas income, HMRC say minimum penalty is 150% Are they correct? Disclosure made recently, so after September 2018 deadline.

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15th Jul 2019 17:34

I thought it was 200% max, with a possible 100% with full mitigation.

Edit:-
https://www.gov.uk/guidance/requirement-to-correct-tax-due-on-offshore-a...

Edit2
You say prompted disclosure so, yes, minimum does seem to be 150%.

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15th Jul 2019 17:46

Am I behind the flow then, I thought you have 3 country categories.

If you have a category 1 (eg European country or something routine), its the normal ones. Ie 20% ish for prompted.

Its only if its stuffed in the bahamas or somewhere you will have a category 3.

Or did that all disappear now?
.

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to ireallyshouldknowthisbut
15th Jul 2019 18:04

It's in category 1 if that helps (OECD countries, etc).

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to ireallyshouldknowthisbut
16th Jul 2019 04:05

ireallyshouldknowthisbut wrote:

Am I behind the flow then, I thought you have 3 country categories.

..........

Or did that all disappear now?
.


Requirement to correct

If, at 5 April 2017, a taxpayer had been non-compliant in respect of their offshore income and gains, they were required to bring their tax affairs up to date by 30 September 2018 under the Requirement to Correct rules. If they failed to do so, ‘Failure to Correct’ (FTC) penalties would apply, being between 100% and 200% of the unpaid tax (irrespective of which Category country is involved). HMRC say that penalties under FTC for a prompted disclosure will not be less than 150% (unless there is a reasonable excuse or special circumstances).
https://www.litrg.org.uk/tax-guides/tax-basics/when-things-go-wrong/tax-...

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to Wanderer
16th Jul 2019 09:12

Right that helps

To be clear the requirement to correct ONLY applies for 2015/16 and prior.

Anything from 2016/17 onwards, is per the usual categories 1-3.

Phew no wonder I was confused, and Red Leader was getting a different answer from HMRC.

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26th Jul 2019 11:55

Do a Google search and you should find that you can argue EU law (freedoms) defence, even for 3rd countries per para 72 here:

http://www.bailii.org/uk/cases/UKUT/TCC/2017/842.html

And an example of similar issues here: http://europa.eu/rapid/press-release_IP-19-4263_en.htm

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