HMRC adds category on penalties for offshore matters
A category has been added to HMRC’s factsheet on higher penalties for offshore matters, with the added section providing information on less extreme penalties given for territories that exchange information with the tax authority automatically
Penalties for category 1 territories have been added showing them to be less extreme than the previous 2 categories. Category 1 territories are ‘territories that have agreed to exchange information with HMRC automatically.’
The maximum penalty for a category 1 territory is 100% of the tax.
HMRC can charge higher penalties for income tax, capital gains tax (CGT) and inheritance tax (IHT) when an offshore matter is involved.
Penalties are charged at over 100% when a return or document contains an inaccuracy, when the taxpayer fails to notify chargeability to tax and for the deliberate withholding of information when a tax return is more than a year late.
Penalties occuring due to inaccuracies
| Category of territory | Careless | Deliberate | Deliberate and concealed |
| 1 Unprompted Prompted |
0%-30% 15%-30% |
20%-70% 35%-70% |
30%-100% 50%-100% |
| 2 Unprompted Prompted |
0%-45% 22.5%-45% |
30%-105% 52.5%-105% |
45%-150% 75%-150% |
| 3 Unprompted Prompted |
0%-60% 30%-60% |
40%-140% 70%-140% |
60%-200% 100%-200% |
HMRC’s Compliance checks: Higher penalties for offshore matters – CC/FS17 is available here.
