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Finance Act 2016

Type Public General Act

Publication 2016-09-15

Last updated 2025-04-24

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(d) anything having effect as if it were income, assets or activities of the kind described above.

(4) Where the tax at stake is inheritance tax, assets are treated for the purposes of sub-paragraph (3) as situated or held in a territory outside the United Kingdom if they are so held or situated immediately after the transfer of value by reason of which inheritance tax becomes chargeable.

(5) Conduct involves an offshore transfer if—

(a) it does not involve an offshore matter,

(b) it is deliberate (whether or not concealed) and results in a potential loss of revenue,

(6) Conduct involves a relevant offshore asset move if at a time when Q is the beneficial owner of an asset (“the qualifying time”)—

(a) the asset ceases to be situated or held in a specified territory and becomes situated or held in a non-specified territory,

(b) the person who holds the asset ceases to be resident in a specified territory and becomes resident in a non-specified territory, or

and Q remains the beneficial owner of the asset, or any part of it, immediately after the qualifying time.

(7) Paragraphs 4(2) to (4) of Schedule 21 to FA 2015 apply for the purposes of sub-paragraph (6) above as they apply for purposes of paragraph 4 of that Schedule.

(8) In sub-paragraph (6) above, “specified territory” has the same meaning as in paragraph 4(5) of Schedule 21 to FA 2015.

Amount of penalty

3

(1) The penalty payable under paragraph 1 is (except in a case mentioned in sub-paragraph (2)) the higher of—

(a) 100% of the potential lost revenue, or

(b) £3,000.

(2) In a case where P has enabled Q to engage in conduct which makes Q liable to a penalty under paragraph 1 of Schedule 21 to FA 2015, the penalty payable under paragraph 1 is the higher of—

(a) 50% of the potential lost revenue in respect of the original tax non-compliance, and

(b) £3,000.

(3) In sub-paragraph (2)(a) “the original tax non-compliance” means the conduct that incurred the original penalty and “the potential lost revenue” (in respect of that non-compliance) is—

(a) the potential lost revenue under Schedule 24 to FA 2007,

(b) the potential lost revenue under Schedule 41 to FA 2008, or

(d) the liability to tax which would have been shown on the return (within the meaning of Schedule 25 to FA 2021),

according to whether the original penalty was incurred under paragraph 1 of Schedule 24, paragraph 1 of Schedule 41 or paragraph 6 of Schedule 55 , paragraph 6 of Schedule 55 or paragraph 3 of Schedule 25.

Potential lost revenue: enabling Q to commit relevant offence

4

(1) The potential lost revenue in a case where P is liable to a penalty under paragraph 1 for enabling Q to commit a relevant offence is the same amount as the potential lost revenue applicable for the purposes of the corresponding relevant civil penalty (determined in accordance with the relevant sub-paragraph of paragraph 5).

(2) Where Q's offending conduct is—

(a) an offence of cheating the public revenue involving offshore activity, or

(b) an offence under section 106A of TMA 1970 involving offshore activity,

the corresponding relevant civil penalty is the penalty which Q is liable for as a result of that offending conduct.

(3) Where Q's offending conduct is an offence under section 106B, 106C or 106D of TMA 1970, the corresponding relevant civil penalty is—

(a) for an offence under section 106B of TMA 1970, a penalty under paragraph 1 of Schedule 41 to FA 2008,

(b) for an offence under section 106C of TMA 1970, a penalty under paragraph 6 of Schedule 55 to FA 2009 or paragraph 3 of Schedule 25 to FA 2021, and

(4) In determining any amount of potential lost revenue for the purposes of this paragraph, the fact Q has been prosecuted for the offending conduct is to be disregarded.

Potential lost revenue: enabling Q to engage in conduct incurring relevant civil penalty

5

(1) The potential lost revenue in a case where P is liable to a penalty under paragraph 1 for enabling Q to engage in conduct that makes Q liable (if the applicable conditions are met) to a relevant civil penalty is to be determined as follows.

(2) In the case of a penalty under paragraph 1 of Schedule 24 to FA 2007 involving an offshore matter or an offshore transfer, the potential lost revenue is the amount that under that Schedule is the potential lost revenue in respect of Q's conduct.

(3) In the case of a penalty under paragraph 1 of Schedule 41 to FA 2008 in relation to a failure to comply with section 7(1) of TMA 1970 involving offshore activity, the potential lost revenue is the amount that under that Schedule is the potential lost revenue in respect of Q's conduct.

(4) In the case of a penalty under paragraph 6 of Schedule 55 to FA 2009 involving offshore activity, the potential lost revenue is the liability to tax which would have been shown in the return in question (within the meaning of that Schedule).

(5) In the case of a penalty under paragraph 3 of Schedule 25 to FA 2021 involving offshore activity, the potential lost revenue is the liability to tax which would have been shown in the return in question (within the meaning of that Schedule).

Treatment of potential lost revenue attributable to both offshore tax evasion or non-compliance and other tax evasion or non-compliance

6

(1) This paragraph applies where any amount of potential lost revenue in a case falling within paragraph 4 or 5 is attributable not only to Q's offshore tax evasion or non-compliance but also to any other tax evasion or non-compliance by Q.

(2) In that case the potential lost revenue in respect of Q's offshore tax evasion or non-compliance is to be taken for the purposes of assessing the penalty to which P is liable as being or (as the case may be) including such share as is just and reasonable of the amount mentioned in sub-paragraph (1).

Reduction of penalty for disclosure etc by P

7

(1) If P (who would otherwise be liable to a penalty under paragraph 1)—

(a) makes a disclosure to HMRC of—

(i) a matter relating to an inaccuracy in a document, a supply of false information or a failure to disclose an under-assessment,

(ii) P's enabling of actions by Q that constituted (or might constitute) a relevant offence or that made (or might make) Q liable to a relevant penalty, or

(iii) any other matter HMRC regard as assisting them in relation to the assessment of P's liability to a penalty under paragraph 1, or

(b) assists HMRC in any investigation leading to Q being charged with a relevant offence or found liable to a relevant penalty,

HMRC must reduce the penalty to one that reflects the quality of the disclosure or assistance.

(2) But the penalty may not be reduced—

(a) in the case of unprompted disclosure or assistance, below whichever is the higher of—

(i) 10% of the potential lost revenue, or

(ii) £1,000, or

(b) in the case of prompted disclosure or assistance, below whichever is the higher of—

(i) 30% of the potential lost revenue, or

(ii) £3,000.

8

(1) This paragraph applies for the purposes of paragraph 7.

(2) P discloses a matter by—

(a) telling HMRC about it,

(b) giving HMRC reasonable help in relation to the matter (for example by quantifying an inaccuracy in a document, an inaccuracy attributable to the supply of false information or withholding of information or an under-assessment), and

(c) allowing HMRC access to records for any reasonable purpose connected with resolving the matter (for example for the purpose of ensuring that an inaccuracy in a document, an inaccuracy attributable to the supply of false information or withholding of information or an under-assessment is fully corrected).

(3) P assists HMRC in relation to an investigation leading to Q being charged with a relevant offence or found liable to a relevant penalty by—

(a) assisting or encouraging Q to disclose all relevant facts to HMRC,

(b) allowing HMRC access to records, or

(4) Disclosure or assistance by P—

(a) is “unprompted” if made at a time when P has no reason to believe that HMRC have discovered or are about to discover Q's offshore tax evasion or non-compliance (including any inaccuracy in a document, supply of false information or withholding of information, or under-assessment), and

(b) otherwise is “prompted”.

(5) In relation to disclosure or assistance, “quality” includes timing, nature and extent.

9

(1) If they think it right because of special circumstances, HMRC may reduce a penalty under paragraph 1.

(2) In sub-paragraph 1 “special circumstances” does not include—

(a) ability to pay, or

(b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential overpayment by another.

(3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to—

(a) staying a penalty, or

(b) agreeing a compromise in relation to proceedings for a penalty.

Procedure for assessing penalty, etc

10

(1) Where a person is found liable for a penalty under paragraph 1 HMRC must—

(a) assess the penalty,

(b) notify the person, and

(2) A penalty must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued.

(3) An assessment of a penalty—

(a) is to be treated for procedural purposes in the same way as an assessment to tax (except in respect of a matter expressly provided for by this Schedule), and

(b) may be enforced as if it were an assessment to tax.

(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) an 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) But 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 take 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) a 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 against 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) so 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 tribunal 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 to 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) In 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) has 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 provisions 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

Interpretation 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 — Application 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, subject 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.

General 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) references 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) references 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

The 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),

(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 the 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

Naming 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 assessed 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 person 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) the person's address (or registered office),

(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) any 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) inform 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 which 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) 10% 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 for the imposition of the minimum penalty,

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

SCHEDULE 21

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

1

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

2

(1) Paragraph 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) under 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 paragraph 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) a 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) After 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) A 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 ensuring 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) Regulations 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) Paragraph 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—

Standard %	Minimum % for prompted disclosure	Minimum % for unprompted disclosure
30%	15%	0%
70%	35%	20%
100%	50%	30%

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

Standard %	Minimum % for prompted disclosure	Minimum % for unprompted disclosure
30%	15%	0%
37.5%	18.75%	0%
45%	22.5%	0%
60%	30%	0%
70%	45%	30%
87.5%	53.75%	35%
100%	60%	40%
105%	62.5%	40%
125%	72.5%	50%
140%	80%	50%
150%	85%	55%
200%	110%	70%

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

5

Schedule 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) under 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 paragraph 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 matter, 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) Sub-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) telling 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) 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 (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 of Commons.

(5) At the end insert—

(5) Paragraph 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

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

Standard %	Minimum % for prompted disclosure	Minimum % for unprompted disclosure
30%	case A: 10%case B: 20%	case A: 0%case B: 10%
70%	35%	20%
100%	50%	30%

8

After paragraph 13 insert—

(13A) (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 standard 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) 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 B— (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.

Standard %	Minimum % for prompted disclosure	Minimum % for unprompted disclosure
30%	case A: 10%case B: 20%	case A: 0%case B: 10%
37.5%	case A: 12.5%case B: 25%	case A: 0%case B: 12.5%
45%	case A: 15%case B: 30%	case A: 0%case B:15%
60%	case A: 20%case B: 40%	case A: 0%case B: 20%
70%	45%	30%
87.5%	53.75%	35%
100%	60%	40%
105%	62.5%	40%
125%	72.5%	50%
140%	80%	50%
150%	85%	55%
200%	110%	70%

Amendments to Schedule 55 to the Finance Act 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) In 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) for 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 involves 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 mentioned 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 involves 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) allowing 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 (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 of 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

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

Standard %	Minimum % for prompted disclosure	Minimum % for unprompted disclosure
70%	35%	20%
100%	50%	30%

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 percentage”) has made a disclosure, HMRC must reduce the standard 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 Table, and (b) in the case of an unprompted disclosure, in column 3 of the Table.

Standard %	Minimum % for prompted disclosure	Minimum % for unprompted disclosure
70%	45%	30%
87.5%	53.75%	35%
100%	60%	40%
105%	62.5%	40%
125%	72.5%	50%
140%	80%	50%
150%	85%	55%
200%	110%	70%

(3) But HMRC must not under this paragraph reduce a penalty below £300.

SCHEDULE 22

PART 1 — Liability for penalty

Circumstances in which asset-based penalty is payable

1

(1) An asset-based penalty is payable by a person (P) where—

(a) one or more standard offshore tax penalties have been imposed on P in relation to a tax year (see paragraphs 2 and 3), and

(b) the potential lost revenue threshold is met in relation to that tax year (see paragraph 4).

(2) But this is subject to paragraph 6 (restriction on imposition of multiple asset-based penalties in relation to the same asset).

Meaning of standard offshore tax penalty

2

(1) A standard offshore tax penalty is a penalty that falls within sub-paragraph (2), (3) (4) or (4A) , (4A) or (4B).

(2) A penalty falls within this sub-paragraph if—

(a) it is imposed under paragraph 1 of Schedule 24 to FA 2007 (inaccuracy in taxpayer's document),

(b) the inaccuracy for which the penalty is imposed involves an offshore matter or an offshore transfer,

(d) the tax at stake is (or includes) capital gains tax, inheritance tax or asset-based income tax.

(3) A penalty falls within this sub-paragraph if—

(a) it is imposed under paragraph 1 of Schedule 41 to FA 2008 (penalty for failure to notify),

(b) the failure for which the penalty is imposed involves an offshore matter or an offshore transfer,

(d) the tax at stake is (or includes) capital gains tax or asset-based income tax.

(4) A penalty falls within this sub-paragraph if—

(a) it is imposed under paragraph 6 of Schedule 55 to FA 2009 (penalty for failure to make return more than 12 months after filing date),

(b) it is imposed for the withholding of information involving an offshore matter or an offshore transfer,

(d) the tax at stake is (or includes) capital gains tax, inheritance tax or asset-based income tax.

(4A) A penalty falls within this paragraph sub-paragraph if—

(a) it is imposed on a person under paragraph 1 of Schedule 18 to FA 2017 (requirement to correct relevant offshore tax non-compliance),

(b) the person was aware at any time during the RTC period that at the end of the 2016-17 tax year P had relevant offshore tax non-compliance to correct, and

(4B) A penalty falls within this sub-paragraph if—

(a) it is imposed under paragraph 3 of Schedule 25 to FA 2021 (penalties for deliberately withholding information),

(b) it is imposed for the withholding of information involving an offshore matter or an offshore transfer, and

(5) In a case where the inaccuracy, failure or withholding of information for which a penalty is imposed involves both an offshore matter or an offshore transfer and a domestic matter, the standard offshore tax penalty is only that part of the penalty that involves the offshore matter or offshore transfer.

(5A) Sub-paragraph (5) does not apply to a penalty imposed under paragraph 1 of Schedule 18 to FA 2017.

(6) In a case where the tax at stake in relation to a penalty includes a tax other than capital gains tax, inheritance tax or asset-based income tax, the standard offshore tax penalty is only that part of the penalty which relates to capital gains tax, inheritance tax or asset-based income tax.

(7) “Asset-based income tax” means income tax that is charged under any of the provisions mentioned in column 1 of the table in paragraph 13(2).

Tax year to which standard offshore tax penalty relates

3

(1) Where a standard offshore tax penalty is imposed under paragraph 1 of Schedule 24 to FA 2007, the tax year to which that penalty relates is—

(a) if the tax at stake as a result of the inaccuracy is income tax or capital gains tax, the tax year to which the document containing the inaccuracy relates;

(b) if the tax at stake as a result of the inaccuracy is inheritance tax, the year, beginning on 6 April and ending on the following 5 April, in which the liability to tax first arose.

(2) Where a standard offshore tax penalty is imposed under paragraph 1 of Schedule 41 to FA 2008 for a failure to comply with an obligation specified in the table in that paragraph, the tax year to which that penalty relates is the tax year to which the obligation relates.

(3) Where a standard offshore tax penalty is imposed under paragraph 6 of Schedule 55 to FA 2009 for a failure to make a return or deliver a document specified in the table of paragraph 1 of that Schedule, the tax year to which that penalty relates is—

(a) if the tax at stake is income tax or capital gains tax, the tax year to which the return or document relates;

(b) if the tax at stake is inheritance tax, the year, beginning on 6 April and ending on the following 5 April, in which the liability to tax first arose.

(4) Where a standard offshore penalty is imposed under paragraph 1 of Schedule 18 to FA 2017, the tax year to which that penalty relates is—

(a) if the tax at stake in relation to the uncorrected relevant offshore tax non-compliance is income tax or capital gains tax, the tax year or years to which the failure or inaccuracy constituting the relevant offshore tax non-compliance in question relates;

(b) if the tax at stake in relation to the uncorrected relevant offshore tax non-compliance is inheritance tax, the year, beginning on 6 April and ending on the following 5 April, in which the liability to tax first arose.

(4A) Where a standard offshore tax penalty is imposed under paragraph 3 of Schedule 25 to FA 2021 for a failure to make a return or deliver a document listed in the table in paragraph 1 of that Schedule, the tax year to which that penalty relates is, if the tax at stake is income tax or capital gains tax, the tax year to which the return or document relates.

(5) In sub-paragraph (4) references to uncorrected relevant offshore tax non-compliance are to the relevant offshore tax non-compliance in respect of which the standard offshore penalty is imposed.

Potential lost revenue threshold

4

(1) The potential lost revenue threshold is reached where the offshore PLR in relation to a tax year exceeds £25,000.

(2) The Treasury may by regulations change the figure for the time being specified in sub-paragraph (1).

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

(4) A statutory instrument containing regulations under sub-paragraph (2) is subject to annulment in pursuance of a resolution of the House of Commons.

(5) Regulations under sub-paragraph (2)—

(a) may make different provision for different purposes;

(b) may contain supplemental, incidental, consequential, transitional and transitory provision.

Offshore PLR

5

(1) The offshore PLR, in relation to a tax year, is the total of—

(a) the potential lost revenue (in the case of a standard offshore tax penalty imposed under Schedule 24 to FA 2007 or Schedule 41 to FA 2008 or Schedule 18 to FA 2017), and

(b) the liability to tax (in the case of a standard offshore tax penalty imposed under Schedule 55 to FA 2009 or Schedule 25 to FA 2021),

by reference to which all of the standard offshore tax penalties imposed on P in relation to the tax year are assessed.

(2) Sub-paragraphs (3) to (5) apply where—

(a) a penalty is imposed on P under paragraph 1 of Schedule 24 to FA 2007, paragraph 1 of Schedule 41 to FA 2008 or paragraph 6 of Schedule 55 to FA 2009 , paragraph 6 of Schedule 55 to FA 2009 or paragraph 3 of Schedule 25 to FA 2021, and

(b) the potential lost revenue or liability to tax by reference to which the penalty is assessed relates to a standard offshore tax penalty and one or more other penalties.

In this paragraph, such a penalty is referred to as a “combined penalty”.

(3) Only the potential lost revenue or liability to tax relating to the standard offshore tax penalty is to be taken into account in calculating the offshore PLR.

(4) Where the calculation of the potential lost revenue or liability to tax by reference to which a combined penalty is assessed depends on the order in which income or gains are treated as having been taxed, for the purposes of calculating the offshore PLR—

(a) income and gains relating to domestic matters are to be taken to have been taxed before income and gains relating to offshore matters and offshore transfers;

(b) income and gains relating to taxes that are not capital gains tax, inheritance tax or asset-based income tax are to be taken to have been taxed before income and gains relating to capital gains tax, inheritance tax and asset-based income tax.

(5) In a case where it cannot be determined—

(a) whether income or gains relate to an offshore matter or offshore transfer or to a domestic matter, or

(b) whether income or gains relate to capital gains tax, asset-based income tax or inheritance tax or not,

for the purposes of calculating the offshore PLR, the potential lost revenue or liability to tax relating to the standard offshore tax penalty is to be taken to be such share of the total potential lost revenue or liability to tax by reference to which the combined penalty was calculated as is just and reasonable.

(6) Sub-paragraph (7) applies where—

(a) a standard offshore tax penalty or a combined penalty is imposed on P, and

(b) there are two or more taxes at stake, including capital gains tax and asset-based income tax.

(7) Where the calculation of the potential lost revenue or liability to tax by reference to which the penalty is assessed depends on the order in which income or gains are treated as having been taxed, for the purposes of calculating the offshore PLR, income and gains relating to asset-based income tax are to be taken to have been taxed before income and gains relating to capital gains tax.

Restriction on imposition of multiple asset-based penalties in relation to the same asset

6

(1) Sub-paragraphs (2) and (3) apply where—

(a) a standard offshore tax penalty (other than one imposed under paragraph 1 of Schedule 18 to FA 2017) has been imposed on P, and

(b) the potential lost revenue threshold is met,

in relation to more than one tax year falling within the same investigation period.

(2) Only one asset-based penalty is payable by P in the investigation period in relation to any given asset.

(3) The asset-based penalty is to be charged by reference to the tax year in the investigation period with the highest offshore PLR.

(4) An “investigation period” is—

(a) the period starting with the day on which this Schedule comes into force and ending with the last day of the last tax year before P was notified of an asset-based penalty in respect of an asset, and

(b) subsequent periods beginning with the day after the previous period ended and ending with the last day of the last tax year before P is notified of a subsequent asset-based penalty in respect of the asset,

and different investigation periods may apply in relation to different assets.

PART 2 — Amount of penalty

Standard amount of asset-based penalty

7

(1) The standard amount of the asset-based penalty is the lower of—

(a) 10% of the value of the asset, and

(b) offshore PLR x 10.

(2) See also—

(a) paragraphs 8 and 9, which provide for reductions in the standard amount, and

(b) Part 3, which makes provision about the identification and valuation of the asset.

Reductions for disclosure and co-operation

8

(1) HMRC must reduce the standard amount of the asset-based penalty where P does all of the following things—

(a) makes a disclosure of the inaccuracy or failure relating to the standard offshore tax penalty;

(b) provides HMRC with a reasonable valuation of the asset;

(2) A reduction under sub-paragraph (1) must reflect the quality of the disclosure, valuation and information provided (and for these purposes “quality” includes timing, nature and extent).

(3) The Treasury must make regulations setting out the maximum amount of the penalty reduction under sub-paragraph (1).

(4) The maximum amount may differ according to whether the case involves only unprompted disclosures or involves prompted disclosures.

(5) A case involves only unprompted disclosures where—

(a) in a case where the asset-based penalty relates to only one standard offshore tax penalty, that standard offshore tax penalty was reduced on the basis of an unprompted disclosure, or

(b) in a case where the asset-based penalty relates to more than one standard offshore tax penalty, all of those standard offshore tax penalties were reduced on the basis of unprompted disclosures.

(6) A case involves prompted disclosures where any of the standard offshore tax penalties to which the asset-based penalty relates was reduced on the basis of a prompted disclosure.

(7) Regulations under sub-paragraph (3) are to be made by statutory instrument.

(8) A statutory instrument containing regulations under sub-paragraph (3) is subject to annulment in pursuance of a resolution of the House of Commons.

(9) Regulations under sub-paragraph (3)—

(a) may make different provision for different purposes;

(b) may contain supplemental, incidental, consequential, transitional and transitory provision.

Special reduction

9

(1) If HMRC think it right because of special circumstances, they may reduce the standard amount of the asset-based penalty.

(2) In sub-paragraph (1) “special circumstances” does not include—

(a) ability to pay, or

(b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another.

(3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to—

(a) staying a penalty, and

(b) agreeing a compromise in relation to proceedings for a penalty.

PART 3 — Identification and valuation of assets

Introduction

10

(1) This Part makes provision about the identification and valuation of the asset for the purposes of calculating the amount of the asset-based penalty.

(2) An asset-based penalty may relate to more than one asset.

(3) The identification and valuation of the asset is to be determined—

(a) under paragraph 11 where the principal tax at stake is capital gains tax,

(b) under paragraph 12 where the principal tax at stake is inheritance tax, and

See also paragraph 14 (jointly held assets).

(4) The principal tax at stake—

(a) in a case where the standard offshore tax penalty (or penalties) relates to only one type of tax, is the tax to which that standard offshore tax penalty (or penalties) relates;

(b) in a case where the standard offshore tax penalty (or penalties) relate to more than one type of tax, is the tax which gives rise to the highest offshore PLR value.

(5) The offshore PLR value, in relation to a type of tax, is the potential lost revenue or liability to tax by reference to which the part of the penalty relating to that type of tax was assessed.

(6) The rules in paragraph 5(2) to (7) apply for the purposes of calculating the offshore PLR value, in relation to a type of tax, as they apply for the purposes of calculating the offshore PLR.

Capital gains tax

11

(1) This paragraph applies where the principal tax at stake is capital gains tax.

(2) The asset is the asset that is the subject of the disposal (or deemed disposal) on or by reference to which the capital gains tax to which the standard offshore penalty relates is charged.

(3) For the purposes of calculating the amount of the asset-based penalty, the value of the asset is to be taken to be the consideration for the disposal of the asset that would be used in the computation of the gain under TCGA 1992 (other than in a case where sub-paragraph (4) applies).

(4) In a case where the disposal on or by reference to which the capital gains tax is charged is a part disposal of an asset, the asset-based penalty is to be calculated by reference to the full market value of the asset immediately before the part disposal took place.

(5) Terms used in this paragraph have the same meaning as in TCGA 1992.

Inheritance tax

12

(1) This paragraph applies where the principal tax at stake is inheritance tax.

(2) The asset is the property the disposition of which gave rise to the transfer of value by reason of which the inheritance tax to which the standard offshore penalty relates became chargeable.

(3) For the purposes of calculating the amount of the asset-based penalty, the value of the property is to be the value of the property used by HMRC in assessing the liability to inheritance tax.

(4) Terms used in this paragraph have the same meaning as in IHTA 1984.

Asset-based income tax

13

(1) This paragraph applies where the principal tax at stake is asset-based income tax.

(2) Where the standard offshore tax penalty relates to income tax charged under a provision shown in column 1 of the Table, the asset is the asset mentioned in column 2 of the Table.

Provision under which income tax is charged	Asset
Chapters 3, 7 and 10 of Part 3 of ITTOIA 2005 (property businesses)	The estate, interest or right in or over the land that generates the income for the business (see sections 264 to 266 of ITTOIA 2005)
Chapter 8 of Part 3 of ITTOIA 2005 (rent receivable in connection with a s.12(4) concern)	The estate, interest or right in or over the land that generates the rent receivable in connection with a UK section 12(4) concern (see sections 335 and 336 of ITTOIA 2005)
Chapters 2 and 2A of Part 4 of ITTOIA 2005 (interest and disguised interest)	The asset that generates the interest
Chapters 3 to 5 of Part 4 of ITTOIA 2005 (dividends etc)	The shares or other securities in relation to which the dividend or distribution is paid
Chapter 7 of Part 4 of ITTOIA 2005 (purchased life annuity payments)	The annuity that gives rise to the payments
Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities)	The deeply discounted securities that are disposed of (see sections 427 to 430 of ITTOIA 2005)
Chapter 9 of Part 4 of ITTOIA 2005 (gains from contracts for life insurance etc)	The policy or contract from which the gain is treated as arising
Chapter 11 of Part 4 of ITTOIA 2005 (transactions in deposits)	The deposit right which is disposed of (see sections 551 and 552 of ITTOIA 2005)
Chapter 2 of Part 5 of ITTOIA 2005 (receipts from intellectual property)	The intellectual property, know-how or patent rights which generate the income (see sections 579, 583 and 587 of ITTOIA 2005)
Chapter 4 of Part 5 of ITTOIA 2005 (certain telecommunication rights: non-trading income)	The relevant telecommunication right from which the income derives (see section 614 of ITTOIA 2005)
Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor)	The settlement which gives rise to the income or capital sums treated as income of a settlor

(2A) In relation to cases where the standard offshore penalty is a penalty falling within paragraph 2(4A), each reference to provisions of ITTOIA 2005 in column 1 of the Table in sub-paragraph (2) includes a reference—

(a) to the corresponding provisions of the legislation in force immediately before those provisions of ITTOIA 2005 came into force (and to any previous text of those corresponding provisions), and

(b) to any other provision that had the same purpose as, or a similar purpose to, any of those corresponding provisions (or any earlier text mentioned in paragraph (a)), if and so far as that other provision was in force—

(i) on or after 6 April 1997, but

(ii) before the corresponding provisions (or the earlier text mentioned in paragraph (a)) came into force.

(3) For the purposes of calculating the amount of the asset-based penalty, the asset is to be valued as follows.

(4) In a case where the charge to income tax was triggered by a disposal of the asset, the value of the asset is to be taken as its market value on the date of disposal (and in the case of a part disposal, the value of the asset is to be taken as its full market value immediately before the part disposal took place).

(5) In any other case—

(a) where P still owns the asset on the last day of the tax year to which the standard offshore tax penalty relates, the value of the asset is to be taken as its market value on that day;

(b) where P disposed of the asset during the course of the tax year to which the standard offshore tax penalty relates, the value of the asset is to be taken as its market value on the date of disposal;

(c) where P disposed of part of the asset during the course of the tax year to which the standard offshore tax penalty relates, the value of the asset is to be taken as the market value of the part disposed on the date (or dates) of disposal plus the market value of the part still owned by the person on the last day of that tax year.

(6) But if the value of the asset, as determined in accordance with sub-paragraphs (4) and (5), does not appear to HMRC to be a fair and reasonable value, then HMRC may value the asset for the purposes of this Schedule in any other way which appears to them to be fair and reasonable.

(7) For the purposes of sub-paragraph (5)—

(a) P owns an asset if P is liable to asset-based income tax in relation to that asset;

(b) references to a disposal (and related expressions) have the same meaning as in TCGA 1992.

(8) In this paragraph “market value” has the same meaning as in TCGA 1992 (see section 272 of that Act).

(9) Other terms used in this paragraph have the same meaning as in ITTOIA 2005.

Jointly held assets

14

(1) This paragraph applies where an asset-based penalty is chargeable in relation to an asset that is jointly held by P and another person (A).

(2) The value of the asset is to be taken to be the value of P's share of the asset.

(3) In a case where P and A—

(a) are married to, or are civil partners of, each other, and

(b) live together,

the asset is to be taken to be jointly owned by P and A in equal shares, unless it appears to HMRC that this is not the case.

PART 4 — Procedure

Assessment

15

(1) Where a person (P) becomes liable for an asset-based penalty under paragraph 1, HMRC must—

(a) assess the penalty,

(b) notify P, and

(i) the tax year to which the penalty relates, and

(ii) the investigation period within which that tax year falls (see paragraph 6).

(2) A penalty under paragraph 1 must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued.

(3) An assessment—

(a) is to be treated for procedural purposes in the same way as an assessment to tax (except in respect of a matter expressly provided for by this Schedule),

(b) may be enforced as if it were an assessment to tax, and

(4) An assessment of an asset-based penalty under paragraph 1 must be made within the period allowed for making an assessment of the standard offshore tax penalty to which the asset-based penalty relates (and where an asset-based penalty relates to more than one standard offshore tax penalty, the assessment must be made within the latest of those periods).

(5) In this Part of this Schedule references to an assessment to tax, in relation to inheritance tax, are to a determination.

Appeal

16

(1) P may appeal against a decision of HMRC that a penalty is payable by P.

(2) P may appeal against a decision of HMRC as to the amount of a penalty payable by P.

17

(1) An appeal is to be treated in the same way as an appeal against an assessment to the tax concerned (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 the Upper Tribunal).

(2) Sub-paragraph (1) does not apply—

(a) so as to require P to pay a penalty before an appeal against the assessment of the penalty is determined, or

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

18

(1) On an appeal under paragraph 16(1), the tribunal may affirm or cancel HMRC's decision.

(2) On an appeal under paragraph 16(2), the tribunal may—

(a) affirm HMRC's decision, or

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

(3) If the tribunal substitutes its decision for HMRC's, the tribunal may rely on paragraph 9—

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

(b) to a different extent, but only if the tribunal thinks that HMRC's decision in respect of the application of paragraph 9 was flawed.

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

(5) In this paragraph “tribunal” means the First-tier Tribunal or the Upper Tribunal (as appropriate by virtue of paragraph 17(1)).

PART 5 — General

Interpretation

19

(1) In this Schedule—

“asset” has the same meaning as in TCGA 1992 (but also includes currency in sterling);

“asset-based income tax” has the meaning given in paragraph 2(7);

“HMRC” means Her Majesty's Revenue and Customs;

“investigation period” has the meaning given in paragraph 6(4);

“offshore PLR” has the meaning given in paragraph 5;

“standard amount of the asset-based penalty” has the meaning given in paragraph 7;

“standard offshore tax penalty” has the meaning given in paragraph 2.

(2) Terms used in relation to a penalty imposed under Schedule 24 to FA 2007, Schedule 41 to FA 2008 Schedule 55 to FA 2009 or Part 1 of Schedule 18 to FA 2017 , Part 1 of Schedule 18 to F(No.2)A 2017 or Schedule 25 to FA 2021 have the same meaning as in the Schedule under which the penalty was imposed.

(3) References in this Schedule to capital gains tax do not include capital gains tax payable by companies in respect of chargeable gains accruing to them to the extent that those gains are NRCGT gains in respect of which the companies are chargeable to capital gains tax under section 14D or 188D of TCGA 1992 (see section 1(2A)(b) of that Act).

Consequential amendments etc

20

(1) In section 103ZA to TMA 1970 (disapplication of sections 100 to 103 in case of certain penalties), omit the “or” at the end of paragraph (h), and at the end insert

, or (j) Schedule 22 to the Finance Act 2016 (asset-based penalty)

(2) In section 107A of that Act (relevant trustees)—

(a) in subsection (2)(a), after “Schedule 55 to the Finance Act 2009” insert “ or Schedule 22 to the Finance Act 2016 ”;

(b) after subsection (3)(a) insert—

(aa) in relation to a penalty under Schedule 22 to the Finance Act 2016, or to interest under section 101 of the Finance Act 2009 on such a penalty, the time when the relevant act or omission occurred;

;

(3) In Schedule 24 to FA 2007 (penalties for errors), in paragraph 12 (interaction with other penalties etc), in sub-paragraph (2A) at the end insert “ or Schedule 22 to FA 2016 (asset-based penalty) ”.

(4) In Schedule 41 to FA 2008 (penalties for failure to notify), in paragraph 15 (interaction with other penalties etc), in sub-paragraph (1A) at the end insert “ or Schedule 22 to FA 2016 (asset-based penalty). ”

(5) In Schedule 55 to FA 2009 (penalty for failure to make return etc), in paragraph 17 (interaction with other penalties etc), in sub-paragraph (2), at the end insert

, or (d) a penalty under Schedule 22 to FA 2016 (asset-based penalty).

21

Section 97A of TMA 1970 (two or more tax-geared penalties in respect of same tax) does not apply in relation to an asset-based penalty imposed under this Schedule.

SCHEDULE 23

1

TMA 1970 is amended in accordance with paragraphs 2 to 8 of this Schedule.

2

In section 7 (notice of liability to income tax and capital gains tax), after subsection (2) insert—

(2A) A person who— (a) falls within subsection (1A) or (1B), and (b) is notified of a simple assessment for the year of assessment, is not required to give notice under subsection (1) for that year unless the person is chargeable to income tax or capital gains tax for the year of assessment on any income or gain that is not included in the assessment.

3

After section 28G (determination of amount notionally chargeable where no NRCGT return delivered) insert—

(28H) (1) HMRC may make a simple assessment for a year of assessment in respect of a person (other than a person to whom section 28I applies) if, when the assessment is made, the person is not excluded by subsection (2) in relation to that year. (2) Subsection (1) does not apply to a person at any time in relation to that year of assessment if— (a) the person has delivered a return under section 8 for that year, or (b) the person is at that time subject to a requirement to make and deliver such a return by virtue of a notice under section 8. but nothing in this subsection prevents HMRC from giving the person notice of a simple assessment at the same time as a notice withdrawing a notice under section 8. (3) A simple assessment is— (a) an assessment of the amounts in which the person is chargeable to income tax and capital gains tax for the year of assessment to which it relates, and (b) an assessment of the amount payable by the person by way of income tax for that year, that is to say, the difference between the amount in which the person is assessed to income tax under paragraph (a) and the aggregate amount of any income tax deducted at source; but nothing in this subsection enables an assessment to show as repayable any income tax which any provision of the Income Tax Acts provides is not repayable. (4) The amounts in which a person is chargeable to income tax and capital gains are net amounts, taking into account any relief or allowance that is applicable. (5) A simple assessment must be based on information relating to the person that is held by HMRC (whether or not supplied by the person to whom the assessment relates). (6) The notice of a simple assessment required to be sent to the person by section 30A(3) must (among other things)— (a) include particulars of the income and gains, and any relief or allowance, taken into account in the assessment, and (b) state any amount payable by the person by virtue of section 59BA (with particulars of how it may be paid and the date by which it is payable). (7) The tax to be assessed on a person by a simple assessment does not include any tax which— (a) is chargeable on the scheme administrator of a registered pension scheme under Part 4 of Finance Act 2004, (b) is chargeable on the sub-scheme administrator of a sub-scheme under Part 4 of the Finance Act 2004 as modified by the Registered Pension Schemes (Splitting of Schemes) Regulations 2006, or (c) is chargeable on the person who is (or persons who are) the responsible person in relation to an employer-financed retirement benefits scheme under section 394(2) of ITEPA 2003. (8) Nothing in this section prevents HMRC issuing more than one simple assessment to the same person in respect of the same year of assessment (whether or not any earlier simple assessment for that year is withdrawn). (9) In this section references to a simple assessment are to an assessment under this section. (28I) (1) HMRC may make a simple assessment for a year of assessment in respect of a settlement if, when the assessment is made, the relevant trustees of the settlement are not excluded by subsection (2) in relation to that year. (2) Subsection (1) does not apply at any time in relation to that year of assessment if— (a) a return under section 8A has been delivered for that year by the relevant trustees or any of them, or (b) there is at that time a subsisting requirement to make and deliver such a return by virtue of a notice under section 8A; but nothing in this subsection prevents HMRC from giving notice of a simple assessment at the same time as a notice withdrawing a notice under section 8A. (3) A simple assessment is— (a) an assessment of the amounts in which the relevant trustees are chargeable to income tax and capital gains tax for the year of assessment to which it relates, and (b) an assessment of the amount payable by them by way of income tax for that year, that is to say, the difference between the amount in which they are assessed to income tax under paragraph (a) and the aggregate amount of any income tax deducted at source; but nothing in this subsection enables an assessment to show as repayable any income tax which any provision of the Income Tax Acts provides is not repayable. (4) The amounts in which the relevant trustees are chargeable to income tax and capital gains are net amounts, taking into account any relief or allowance that is applicable. (5) A simple assessment must be based only on information relating to the settlement that is held by HMRC (whether or not supplied by the relevant trustees). (6) The notice of a simple assessment required by section 30A(3) may be given to any one or more of the relevant trustees. (7) That notice must (among other things)— (a) include particulars of the income and gains, and any relief or allowance, taken into account in the assessment, and (b) state any amount payable by the relevant trustees by virtue of section 59BA (with particulars of how it may be paid and the date by which it is payable). (8) The tax to be assessed by a simple assessment does not include any tax which— (a) is chargeable on the scheme administrator of a registered pension scheme under Part 4 of Finance Act 2004, (b) is chargeable on the sub-scheme administrator of a sub-scheme under Part 4 of the Finance Act 2004 as modified by the Registered Pension Schemes (Splitting of Schemes) Regulations 2006, or (c) is chargeable on the person who is (or persons who are) the responsible person in relation to an employer-financed retirement benefits scheme under section 394(2) of ITEPA 2003. (9) Nothing in this section prevents HMRC issuing more than one simple assessment in respect of the same settlement and the same year of assessment (whether or not any earlier simple assessment for that year is withdrawn). (10) In this section references to a “simple assessment” are to an assessment under this section. (11) In this Act references to the person to whom a simple assessment relates are, in relation to one made under this section, to the relevant trustees of the settlement to which it relates. (28J) (1) HMRC may withdraw a simple assessment by notice to the person to which it relates. (2) An assessment that has been withdrawn ceases to have effect (and is to be taken as never having had any effect).

4

In section 31 (appeals: right to appeal), before subsection (4) insert—

(3A) In the case of a simple assessment, the right to appeal under subsection (1)(d) does not apply unless and until the person concerned has— (a) raised a query about the assessment under section 31AA, and (b) been given a final response to that query.

5

(1) Section 31A (appeals: notice of appeal) is amended as follows.

(2) In subsection (4), after “this Act” insert “ (other than an appeal against a simple assessment) ”.

(3) After subsection (4) insert—

(4A) In relation to an appeal under section 31(1)(d) against a simple assessment— (a) the specified date is the date on which the person concerned is given notice under section 31AA of the final response to the query the person is required by section 31(3A) to make, and (b) the relevant officer of the Board is the officer by whom the notice of assessment was given.

6

After section 31A (notice of appeal) insert—

(31AA) (1) This section applies where a person has been given notice of a simple assessment. (2) The person may query the simple assessment by notifying HMRC of— (a) a belief that the assessment is or may be incorrect, and (b) the reasons for that belief. (3) The person may exercise the power to query the simple assessment at any time within— (a) the period of 60 days after the date on which the notice of assessment was issued, or (b) such longer period as HMRC may allow. (4) If the simple assessment is queried, HMRC must— (a) consider the query and the matters raised by it, and (b) give a final response to the query. (5) The person may at any time withdraw a query (which terminates HMRC's duties under subsection (4)). (6) If it appears to HMRC that— (a) they need time to consider the matters raised by the query, or (b) further information (whether from the person or anyone else) is required, HMRC may postpone the simple assessment in whole or part (according to how much of it is being queried by the person). (7) If the simple assessment is postponed in whole or part, HMRC must notify the person in writing— (a) whether the assessment is postponed in whole or part, and (b) if it is postponed in part, of the amount that remains payable under the assessment. (8) While the simple assessment is postponed the person is under no obligation to pay— (a) the payable amount specified in the notice of assessment (if the whole assessment is postponed), or (b) the postponed part of the payable amount so specified (if the assessment is postponed in part). (9) After considering the query the final response must be to— (a) confirm the simple assessment, (b) give the person an amended simple assessment (which supersedes the original assessment), or (c) withdraw the simple assessment (without replacing it). (10) HMRC must notify the person in writing of their final response. (11) This section does not apply to an amended simple assessment given as a final response to the query. (12) Nothing in this section affects— (a) a person's right to request an explanation from HMRC of a simple assessment or the information on which it is based, or (b) HMRC's power to give a person such explanation or information as they consider appropriate, whether as part of the querying process under this section or otherwise. (13) In subsection (12) “person” means a person who has been given notice of a simple assessment

7

(1) Section 59B (payment of income tax and capital gains tax) is amended as follows.

(2) In the heading, at end insert “ : assessments other than simple assessments ”.

(3) In subsection (6), after “9” insert “ , 28H or 28I ”.

8

After section 59B insert—

(59BA) (1) This section applies where a person has been given a simple assessment in relation to a year of assessment. (2) Subject to subsection (3), the difference between— (a) the amount of income tax and capital gains tax for that year contained in the simple assessment, and (b) the aggregate of any payments on account made by the person in respect of that year (whether under section 59A or 59AA or otherwise) and any income tax which in respect of that year has been deducted at source, is payable by that person as mentioned in subsection (4) or (5). (3) Nothing in subsection (2) is to be read as requiring the repayment of any income tax which any provision of the Income Tax Acts provides is not repayable. (4) In a case where the person is given notice of the simple assessment after the 31st October next after the year of assessment, the difference is payable at the end of the period of 3 months after the day on which that notice was given. (5) In any other case the difference is payable on or before the 31st January next after the end of the year of assessment. (6) Section 59B(7) (which explains references to income tax deducted at source) applies for the purposes of this section. (7) PAYE regulations may provide that, for the purpose of determining the amount of the difference mentioned in subsection (2), any necessary adjustments in respect of matters prescribed in the regulations shall be made to the amount of tax deducted at source under PAYE regulations.

9

(1) Schedule 56 to FA 2009 (penalty for failure to make payments on time) is amended as follows.

(2) In the Table in paragraph 1, after item 1 insert—

1A	Income tax or capital gains tax	Amount payable under section 59BA(4) or (5) of TMA 1970	The date falling 30 days after the date specified in section 59BA(4) or (5) of TMA 1970 as the date by which the amount must be paid.

(3) In paragraph 3(1)(a), after “items 1,” insert “ 1A, ”.

SCHEDULE 24

PART 1 — Tax advantages to which section 180(2)applies

Enhanced capital allowances

Creative tax reliefs

Research and development reliefs

PART 2 — Tax advantages to which section 180(5) applies

SCHEDULE 25

Membership

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Term of office

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appointment of initial members

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Termination of appointments

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Remuneration

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision of staff and facilities etc.

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Validity of proceedings

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary powers

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disqualification

12

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Freedom of information

14

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Public sector equality duty

15

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income tax charge and rates for 2016-17

Personal allowance for 2017-18

Savings allowance, and savings nil rate etc

Rates of tax on dividend income, and abolition of dividend tax credits etc

Structure of income tax rates

Taxable benefits: application of Chapters 5 to 7 of Part 3 of ITEPA 2003

Cars: appropriate percentage for 2019-20 and subsequent tax years

Cash equivalent of benefit of a van

Travel expenses of workers providing services through intermediaries

Taxable benefits: PAYE

Standard lifetime allowance from 2016-17

Dependants' scheme pensions

Pension flexibility

Averaging profits of farmers etc

EIS and VCTs: definition of certain periods

EIS, SEIS and VCTs: exclusion of energy generation

EIS and VCTs: definition of certain periods

EIS and VCTs: election

Transactions in securities: company distributions

Transactions in securities: procedure for counteraction of advantage

Income-based carried interest

Tax treatment of supplementary welfare payments: Northern Ireland

Charge for financial year 2017

Abolition of vaccine research relief

Intangible fixed assets: pre-FA 2002 assets

Loans to participators etc: trustees of charitable trusts

Intangible fixed assets: transfers treated as at market value

Banking companies: excluded entities

Banking companies: restrictions on loss relief etc

Reduction in rate of supplementary charge

Investment allowance: disqualifying conditions

Investment allowance: power to expand meaning of “relevant income”

Cluster area allowance: power to expand meaning of “relevant income”

Profits from the exploitation of patents etc

Power to make regulations about the taxation of securitisation companies

Hybrid and other mismatches

Capital allowances: anti-avoidance relating to disposals

Capital allowances: designated assisted areas

Capital allowances: anti-avoidance relating to disposals

Transfer pricing: application of OECD principles

Property business deductions: wear and tear allowance

Corporation tax: territorial scope etc

Corporation tax: transactions in UK land

Income tax: territorial scope etc

Income tax: transactions in UK land

Pre-trading expenses

Reduction in rate of capital gains tax

Entrepreneurs' relief: associated disposals

Entrepreneurs' relief: disposal of goodwill

Entrepreneurs' relief: “trading company” and “trading group”

Employee shareholder shares: disguised fees and carried interest

Inheritance tax: pension drawdown funds

Inheritance tax: victims of persecution during Second World War era

Inheritance tax: gifts for national purposes etc

Estate duty: objects of national, scientific, historic or artistic interest

Apprenticeship levy

Connected charities

Application of other regimes to apprenticeship levy

Anti-avoidance

VAT: representatives and security

Crown application

VAT: power to provide for persons to be eligible for refunds

SDLT: calculating tax on non-residential and mixed transactions

VAT: women's sanitary products

SDLT: calculating tax on non-residential and mixed transactions

SDLT higher rate: land purchased for commercial use

SDLT higher rate: acquisition under regulated home reversion plan

SDLT higher rate: properties occupied by certain employees etc

ATED: properties occupied by certain employees etc

SDRT: transfers to depositaries or providers of clearance services

Landfill tax: rates from 1 April 2017

Landfill tax: rates from 1 April 2018

Insurance premium tax: standard rate

CCL: abolition of exemption for electricity from renewable sources

CCL: main rates from 1 April 2018

APD: rates from 1 April 2016

VED: rates for light passenger vehicles, light goods vehicles, motorcycles etc

VED: extension of old vehicles exemption from 1 April 2017

General anti-abuse rule: provisional counteractions

General anti-abuse rule: binding of tax arrangements to lead arrangements

General anti-abuse rule: penalty

Promoters of tax avoidance schemes

Penalties for enablers of offshore tax evasion or non-compliance

HMRC power to withdraw notice to file a tax return

Rate of interest applicable to judgment debts etc: Northern Ireland

HMRC power to withdraw notice to file a tax return

Data-gathering powers: daily penalties for extended default

Data-gathering powers: providers of payment or intermediary services

Data-gathering powers: daily penalties for extended default

Extension of provisions about set-off to Scotland

Interpretation

Power to publish state aid information

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