Finance (No. 2) Bill (HC Bill 155)

(4) A supplementary assessment may be made in respect of a penalty if an
earlier assessment operated by reference to an underestimate of the liability
to tax that would have been shown in a return.

(5) Sub-paragraph (6) applies if—

(a) 5an assessment in respect of a penalty is based on a liability to tax that
would have been shown on a return, and

(b) that liability is found by HMRC to have been excessive.

(6) HMRC may amend the assessment so that it is based upon the correct
amount.

(7) 10But an amendment under sub-paragraph (6)—

(a) does not affect when the penalty must be paid, and

(b) may be made after the last day on which the assessment in question
could have been made under paragraph 11.

11 An assessment of a person as liable to a penalty under paragraph 1 may not
15take place more than 2 years after the fulfilment of the conditions mentioned
in paragraph 1(1) (in relation to that person) first came to the attention of an
officer of Revenue and Customs.

Appeals

12 A person may appeal against—

(a) 20a decision of HMRC that a penalty under paragraph 1 is payable by
that person, or

(b) a decision of HMRC as to the amount of a penalty under paragraph
1 payable by the person.

13 (1) An appeal under paragraph 12 is to be treated in the same way as an appeal
25against an assessment to the tax at stake (including by the application of any
provision about bringing the appeal by notice to HMRC, about HMRC
review of the decision or about determination of the appeal by the First-tier
Tribunal or Upper Tribunal).

(2) Sub-paragraph (1) does not apply—

(a) 30so as to require the person bringing the appeal to pay a penalty
before an appeal against the assessment of the penalty is determined,

(b) in respect of any other matter expressly provided for by this
Schedule.

14 (1) On an appeal under paragraph 12(a) that is notified to the tribunal, the
35tribunal may affirm or cancel HMRC’s decision.

(2) On an appeal under paragraph 12(b) that is notified to the tribunal, the
tribunal may—

(a) affirm HMRC’s decision, or

(b) substitute for that decision another decision that HMRC had power
40to make.

(3) If the tribunal substitutes its own decision for HMRC’s, the tribunal may
rely on paragraph 7 or 9 (or both)—

(a) to the same extent as HMRC (which may mean applying the same
percentage reduction as HMRC to a different starting point),

(b) to a different extent, but only if the tribunal thinks that HMRC’s
decision in respect of the application of that paragraph was flawed.

(4) In sub-paragraph (3)(b) “flawed” means flawed when considered in the light
of the principles applicable in proceedings for judicial review.

(5) 5In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal
(as appropriate by virtue of paragraph 13(1).

Double jeopardy

15 A person is not liable to a penalty under paragraph 1 in respect of conduct
for which the person—

(a) 10has been convicted of an offence, or

(b) has been assessed to a penalty under any provision other than
paragraph 1.

Application of provisions of TMA 1970

16 Subject to the provisions of this Part of this Schedule, the following
15provisions of TMA 1970 apply for the purposes of this Part of this Schedule
as they apply for the purposes of the Taxes Acts—

(a) section 108 (responsibility of company officers),

(b) section 114 (want of form), and

(c) section 114 (delivery and service of documents).

20Interpretation of Part 1

17 (1) This paragraph applies for the purposes of this Schedule.

(2) References to an assessment to tax, in relation to inheritance tax, are to a
determination.

Part 2 25Application of Schedule 36 to FA 2008: information powers

General application of information and inspection powers to suspected enablers

18 (1) Schedule 36 to FA 2008 (information and inspection powers) applies for the
purpose of checking a relevant person’s position as regards liability for a
penalty under paragraph 1 as it applies for checking a person’s tax position,
30subject to the modifications in paragraphs 19 to 21.

(2) In this Part of this Schedule “relevant person” means a person an officer of
Revenue and Customs has reason to suspect has or may have enabled
offshore tax evasion or non-compliance by another person so as to be liable
to a penalty under paragraph 1.

35General modifications

19 In its application for the purpose mentioned in paragraph 18(1) Schedule 36
to FA 2008 has effect as if—

(a) any provisions which can have no application for that purpose, or
are specifically excluded by paragraph 20, were omitted,

(b) references to “the taxpayer” were references to the relevant person
whose position as regards liability for a penalty under paragraph 1
is to be checked, and references to “a taxpayer” were references to a
relevant person,

(c) 5references to a person’s “tax position” are to the relevant person’s
position as regards liability for a penalty under paragraph 1,

(d) references to prejudice to the assessment or collection of tax included
a reference to prejudice to the investigation of the relevant person’s
position as regards liability for a penalty under paragraph 1,

(e) 10references to information relating to the conduct of a pending appeal
relating to tax were references to information relating to the conduct
of a pending appeal relating to an assessment of liability for a penalty
under paragraph 1.

Specific modifications

20 15The following provisions are excluded from the application of Schedule 36
to FA 2008 for the purpose mentioned in paragraph 18(1)—

(a) paragraph 24 (exception for auditors),

(b) paragraph 25 (exception for tax advisers),

(c) paragraphs 26 and 27 (provisions supplementary to paragraphs 24
20and 25),

(d) paragraphs 50 and 51 (tax-related penalty).

21 In the application of Schedule 36 to FA 2008 for the purpose mentioned in
paragraph 18(1), paragraph 10A (power to inspect business premises of
involved third parties) has effect as if the reference in sub-paragraph (1) to
25the position of any person or class of persons as regards a relevant tax were
a reference to the position of a relevant person as regards liability for a
penalty under paragraph 1.

Part 3 Publishing details of persons found liable to penalties

30Naming etc of persons assessed to penalty or penalties under paragraph 1

22 (1) The Commissioners for Her Majesty’s Revenue and Customs (“the
Commissioners”) may publish information about a person if—

(a) in consequence of an investigation the person has been found to have
incurred one or more penalties under paragraph 1 (and has been
35assessed or is the subject of a contract settlement), and

(b) the potential lost revenue in relation to the penalty (or the aggregate
of the potential lost revenue in relation to each of the penalties)
exceeds £25,000.

(2) The Commissioners may also publish information about a person if the
40person has been found to have incurred 5 or more penalties under
paragraph 1 in any 5 year period.

(3) The information that may be published is—

(a) the person’s name (including any trading name, previous name or
pseudonym),

(b) 45the person’s address (or registered office),

(c) the nature of any business carried on by the person,

(d) the amount of the penalty or penalties in question,

(e) the periods or times to which the actions giving rise to the penalty or
penalties relate,

(f) 5any other information that the Commissioners consider it
appropriate to publish in order to make clear the person’s identity.

(4) The information may be published in any manner that the Commissioners
consider appropriate.

(5) Before publishing any information the Commissioners must—

(a) 10inform the person that they are considering doing so, and

(b) afford the person the opportunity to make representations about
whether it should be published.

(6) No information may be published before the day on which the penalty
becomes final or, where more than one penalty is involved, the latest day on
15which any of the penalties becomes final.

(7) No information may be published for the first time after the end of the
period of one year beginning with that day.

(8) No information may be published if the amount of the penalty—

(a) is reduced under paragraph 7 to—

(i) 2010% of the potential lost revenue (in a case of unprompted
disclosure or assistance), or

(ii) 30% of potential lost revenue (in a case of prompted
disclosure or assistance),

(b) would have been reduced to 10% or 30% of potential lost revenue but
25for the imposition of the minimum penalty,

(c) is reduced under paragraph 9 to nil or stayed.

(9) For the purposes of this paragraph a penalty becomes final—

(a) if it has been assessed, when the time for any appeal or further
appeal relating to it expires or, if later, any appeal or final appeal
30relating to it is finally determined, and

(b) if a contract settlement has been made, at the time when the contract
is made.

(10) In this paragraph “contract settlement”, in relation to a penalty, means a
contract between the Commissioners and the person under which the
35Commissioners undertake not to assess the penalty or (if it has been
assessed) not to take proceedings to recover it.

23 (1) The Treasury may by regulations amend paragraph 22(1) to vary the amount
for the time being specified in paragraph (b).

(2) Regulations under this paragraph are to be made by statutory instrument.

(3) 40A statutory instrument under this paragraph is subject to annulment in
pursuance of a resolution of the House of Commons.

Section 151

SCHEDULE 21 Penalties relating to offshore matters and offshore transfers

Amendments to Schedule 24 to the Finance Act 2007 (c. 11)2007 (c. 11)

1 Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

2 (1) 5Paragraph 9 (reductions for disclosure) is amended as follows.

(2) For sub-paragraph (A1) substitute—

“(A1) Paragraph 10 provides for reductions in penalties—

(a) under paragraph 1 where a person discloses an inaccuracy
that involves a domestic matter,

(b) 10under paragraph 1A where a person discloses a supply of
false information or withholding of information, and

(c) under paragraph 2 where a person discloses a failure to
disclose an under-assessment.

(A2) Paragraph 10A provides for reductions in penalties under
15paragraph 1 where a person discloses an inaccuracy that involves
an offshore matter or an offshore transfer.

(A3) Sub-paragraph (1) applies where a person discloses—

(a) an inaccuracy that involves a domestic matter,

(b) a careless inaccuracy that involves an offshore matter,

(c) 20a supply of false information or withholding of
information, or

(d) a failure to disclose an under-assessment.”

(3) In sub-paragraph (1), in the words before paragraph (a), for the words from
“an inaccuracy” to “under-assessment” substitute “the matter”.

(4) 25After sub-paragraph (1) insert—

“(1A) Sub-paragraph (1B) applies where a person discloses—

(a) a deliberate inaccuracy (whether concealed or not) that
involves an offshore matter, or

(b) an inaccuracy that involves an offshore transfer.

(1B) 30A person discloses the inaccuracy by—

(a) telling HMRC about it,

(b) giving HMRC reasonable help in quantifying the
inaccuracy,

(c) allowing HMRC access to records for the purpose of
35ensuring that the inaccuracy is fully corrected, and

(d) providing HMRC with additional information.

(1C) The Treasury must make regulations setting out what is meant by
“additional information” for the purposes of sub-paragraph
(1B)(d).

(1D) 40Regulations under sub-paragraph (1C) are to be made by statutory
instrument.

(1E) An instrument containing regulations under sub-paragraph (1C)
is subject to annulment in pursuance of a resolution of the House
of Commons.”

(5) At the end insert—

“(4) 5Paragraph 4A(4) to (5) applies to determine whether an inaccuracy
involves an offshore matter, an offshore transfer or a domestic
matter for the purposes of this paragraph.”

3 In paragraph 10 (amount of reduction for disclosure), for the Table in sub-
paragraph (2) substitute—

4 After paragraph 10 insert—

“10A (1) If a person who would otherwise be liable to a penalty of a
percentage shown in column 1 of the Table (a “standard
percentage”) has made a disclosure, HMRC must reduce the
20standard percentage to one that reflects the quality of the
disclosure.

(2) But the standard percentage may not be reduced to a percentage
that is below the minimum shown for it—

(a) in the case of a prompted disclosure, in column 2 of the
25Table, and

(b) in the case of an unprompted disclosure, in column 3 of the
Table.

Amendments to Schedule 41 to the Finance Act 2008 (c. 9)2008 (c. 9)

5 10Schedule 41 to FA 2008 (penalties: failure to notify etc) is amended as
follows.

6 (1) Paragraph 12 (reductions for disclosure) is amended as follows.

(2) For sub-paragraph (1) substitute—

“(1) Paragraph 13 provides for reductions in penalties—

(a) 15under paragraph 1 where P discloses a relevant failure that
involves a domestic matter, and

(b) under paragraphs 2 to 4 where P discloses a relevant act or
failure.

(1A) Paragraph 13A provides for reductions in penalties under
20paragraph 1 where P discloses a relevant failure that involves an
offshore matter or an offshore transfer.

(1B) Sub-paragraph (2) applies where P discloses—

(a) a relevant failure that involves a domestic matter,

(b) a non-deliberate relevant failure that involves an offshore
25matter, or

(c) a relevant act or failure giving rise to a penalty under any
of paragraphs 2 to 4.”

(3) In sub-paragraph (2), for “a” substitute “the”.

(4) After sub-paragraph (2) insert—

“(2A) 30Sub-paragraph (2B) applies where P discloses—

(a) a deliberate relevant failure (whether concealed or not)
that involves an offshore matter, or

(b) a relevant failure that involves an offshore transfer.

(2B) P discloses the failure by—

(a) 35telling HMRC about it,

(b) giving HMRC reasonable help in quantifying the tax
unpaid by reason of it,

(c) allowing HMRC access to records for the purpose of
checking how much tax is so unpaid, and

(d) 40providing HMRC with additional information.

(2C) The Treasury must make regulations setting out what is meant by
“additional information” for the purposes of sub-paragraph
(2B)(d).

(2D) Regulations under sub-paragraph (2C) are to be made by statutory
5instrument.

(2E) An instrument containing regulations under sub-paragraph (2C)
is subject to annulment in pursuance of a resolution of the House
of Commons.”

(5) At the end insert—

“(5) 10Paragraph 6A(4) to (5) applies to determine whether a failure
involves an offshore matter, an offshore transfer or a domestic
matter for the purposes of this paragraph.

(6) In this paragraph “relevant failure” means a failure to comply with
a relevant obligation.”

7 15In paragraph 13 (amount of reduction for disclosure), for the Table in sub-
paragraph (3) substitute—

8 After paragraph 13 insert—

“13A (1) 25If a person who would otherwise be liable to a penalty of a
percentage shown in column 1 of the Table (a “standard
percentage”) has made a disclosure, HMRC must reduce the
standard percentage to one that reflects the quality of the
disclosure.

(2) 30But the standard percentage may not be reduced to a percentage
that is below the minimum shown for it—

(a) for a prompted disclosure, in column 2 of the Table, and

(b) for an unprompted disclosure, in column 3 of the Table.

(3) Where the Table shows a different minimum for case A and case
35B—

(a) the case A minimum applies if HMRC becomes aware of
the failure less than 12 months after the time when the tax
first becomes unpaid by reason of the failure;

(b) otherwise, the case B minimum applies.

20Amendments to Schedule 55 to the Finance Act 2009 (c.10)2009 (c.10)

9 Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended
as follows

10 (1) Paragraph 14 (reductions for disclosure) is amended as follows.

(2) At the beginning insert—

“(A1) 25In this paragraph, “relevant information” means information
which has been withheld by a failure to make a return.”

(3) In sub-paragraph (1)—

(a) after “6(3) or (4)” insert “where P discloses relevant information that
involves a domestic matter”;

(b) 30for the words from “information which” to the end substitute
“relevant information”.

(4) After sub-paragraph (1) insert—

“(1A) Paragraph 15A provides for reductions in the penalty under
paragraph 6(3) or (4) where P discloses relevant information that
35involves an offshore matter or an offshore transfer.

(1B) Sub-paragraph (2) applies where—

(a) P is liable to a penalty under paragraph 6(3) or (4) and P
discloses relevant information that involves a domestic
matter, or

(b) P is liable to a penalty under any of the other provisions
5mentioned in sub-paragraph (1) and P discloses relevant
information.”

(5) After sub-paragraph (2) insert—

“(2A) Sub-paragraph (2B) applies where P is liable to a penalty under
paragraph 6(3) or (4) and P discloses relevant information that
10involves an offshore matter or an offshore transfer.

(2B) P discloses relevant information by—

(a) telling HMRC about it,

(b) giving HMRC reasonable help in quantifying any tax
unpaid by reason of its having been withheld,

(c) 15allowing HMRC access to records for the purpose of
checking how much tax is so unpaid, and

(d) providing HMRC with additional information.

(2C) The Treasury must make regulations setting out what is meant by
“additional information” for the purposes of sub-paragraph
20(2B)(d).

(2D) Regulations under sub-paragraph (2C) are to be made by statutory
instrument.

(2E) An instrument containing regulations under sub-paragraph (2C)
is subject to annulment in pursuance of a resolution of the House
25of Commons.”

(6) At the end insert—

“(5) Paragraph 6A(4) to (5) applies to determine whether relevant
information involves an offshore matter, an offshore transfer or a
domestic matter for the purposes of this paragraph.”

11 30In paragraph 15 (amount of reduction for disclosure), for the Table in sub-
paragraph (2) substitute—

12 After paragraph 15 insert—

“15A (1) If a person who would otherwise be liable to a penalty of a
percentage shown in column 1 of the Table (a “standard
40percentage”) has made a disclosure, HMRC must reduce the
standard percentage to one that reflects the quality of the
disclosure.