SolvedFHDDS51535 | Penalties, sanctions and offences: penalties – policy: Trading without approval - Examples of unprompted or prompted disclosure
From HM Revenue & Customs · VAT Fulfilment House Due Diligence Scheme
Example 1
John takes over a logistics business which supplies imported goods fulfilment services. He does not realise he needs to be approved before he can start trading. He reads about the FHDDS in a HMRC article in trade press and contacts HMRC immediately. This is an unprompted disclosure.
Example 2
John takes over a logistics business which supplies imported goods fulfilment services. He does not realise he needs to be approved before he can start trading. He is contacted by HMRC who received notification from the previous owner that they wanted to cancel their FHDDS number as they had sold their business. John realises we have information suggesting he is trading without approval and tells us about it. This is a prompted disclosure because we made the initial contact with him.
Maximum and minimum penalties for each type of behaviour
The following tables show the maximum and minimum penalty percentages for each type of behaviour.
Deliberate and concealed
| Percentage of ‘maximum amount’ | Monetary value | |
|---|---|---|
| Maximum penalty | 100% | £10,000 |
| Minimum penalty for prompted disclosure | 100% | £10,000 |
| Minimum penalty for unprompted disclosure | 30% | £3,000 |
Deliberate but not concealed
| Percentage of ‘maximum amount’ | Monetary value | |
|---|---|---|
| Maximum penalty | 70% | £7,000 |
| Minimum penalty for prompted disclosure | 35% | £3,500 |
| Minimum penalty for unprompted disclosure | 20% | £2,000 |
Non-deliberate (without reasonable excuse)
| Percentage of ‘maximum amount’ | Monetary value | |
|---|---|---|
| Maximum penalty | 30% | £3,000 |
| Minimum penalty for prompted disclosure | 20% | £2,000 |
| Minimum penalty for unprompted disclosure | 10% | £1,000 |