SolvedCH95600 | Penalties for VAT and Excise Wrongdoing: Calculating the Penalty: Calculation process: Unprompted disclosure calculation: Example
From HM Revenue & Customs · Compliance Handbook
Tedros has made an unprompted disclosure involving the deliberate (without concealment) unauthorised issue of an invoice showing VAT. The PLR is £145,000.
Step 1
The percentage for the quality of the disclosure (a) has been calculated at 65%.
Step 2
The maximum penalty (b) is 70 % and the minimum penalty (c) is 20%.
So the maximum disclosure reduction (d) is 70 - 20 = 50%.
Step 3
The actual reduction percentage for disclosure (e) is 50 x 65% = 32.5%.
Step 4
Penalty percentage to be charged (f) is 70% - 32.5% = 37.5%.
Step 5
The penalty to be charged (g) is £145,000 x 37.5% = £54,375.