Introduction Reductions for disclosure
24.Paragraphs 14 and 15 provide details of reductions for disclosure in penalties under paragraphs 6, 11(3) or 11(4) where the taxpayer discloses relevant information, which has been withheld by a failure to make a return.
25.Paragraph 14(2) defines what is meant by disclosure of relevant information. It sets out three distinct elements, all of which are required for the maximum reduction: admission – telling HMRC that information has been withheld; taking active steps – giving HMRC reasonable help in assessing any tax unpaid as a result of the information being withheld; and access – allowing HMRC access to records to check the extent of any liability.
26.Paragraph 14(3) sets out two types of disclosure: unprompted – where the taxpayer has no reason to believe that HMRC have discovered or are about to discover the relevant information; prompted – all other disclosures.
27.Paragraph 14(4) defines the quality of disclosure in terms of timing (how promptly the disclosure was made), nature (the level of evidence provided and degree of access to test the disclosure) and extent (how complete the disclosure may be).
28.Paragraph 15 describes how the penalties must be reduced, depending upon the quality of the disclosure.
29.Paragraph 15(5) states that HMRC must not reduce the penalty under this paragraph to below the minimum amount set under paragraph 14.