IEIM405131 | Penalty Reductions for Failure Penalties

Penalty Reductions for Failure Penalties

A penalty of up to £5,000 may be charged if a Reporting Financial Institution fails to comply with any of the following obligations:

• Failure to file a report on time

• Failure to provide an officer of Revenue and Customs with information in respect of its obligations under the Regulations within the deadline specified in a written notice (being no less than 14 days)

• Failure to comply with record keeping requirements

When assessing the amount of the penalty, HMRC will consider the frequency of the failure. A first failure will attract a lower penalty, while subsequent failures will lead to increased penalty levels. Each category of penalty listed above will be considered independently, so the level of penalty for a failure to comply with record keeping requirements in year 2 will not be affected by a failure to report on time in year 1. Where a failure is followed by subsequent years of compliance, a further failure will attract a lower penalty again.