Legalize / United Kingdom / Public General Act

Finance (No. 2) Act 2017

Type Public General Act

Publication 2017-11-16

Last updated 2025-03-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Provision of information to HMRC by introducers

31

(1) This paragraph applies where HMRC suspect—

(a) that a person (P) is an introducer in relation to a proposal, and

(b) that the proposal may be notifiable.

(2) HMRC may by written notice require P to provide HMRC with one or both of the following—

(a) prescribed information in relation to each person who has provided P with any information relating to the proposal,

(b) prescribed information in relation to each person with whom P has made a marketing contact in relation to the proposal.

(3) A notice must specify the proposal to which it relates.

(4) P must comply with a requirement under or sub-paragraph(2) within—

(a) the relevant period, or

(b) such longer period as HMRC may direct.

(5) In sub-paragraph (4) “the relevant period” is the period of 11 days beginning with the day on which the notice under sub-paragraph (2) is given.

Legal professional privilege

32

(1) Nothing in this Part of this Schedule requires any person to disclose to HMRC any privileged information.

(2) In this Part of this Schedule “privileged information” means information with respect to which a claim to legal professional privilege, or, in Scotland, to confidentiality of communications, could be maintained in legal proceedings.

Information

33

(1) This paragraph applies where a person is required to provide information under paragraph 23(2) , 23A(2) or 24(3).

(2) HMRC may specify additional information which must be provided by that person to the recipients under paragraph 23(2) , 23A(2) or 24(3) at the same time as the information referred to in sub-paragraph (1).

(3) HMRC may specify the form and manner in which the additional information is to be provided.

(4) For the purposes of this paragraph “additional information” means information supplied by HMRC which relates to notifiable proposals or notifiable arrangements in general.

34

(1) HMRC may specify the form and manner in which information required to be provided by or under any of the information provisions must be provided if the provision is to be complied with.

(2) The “information provisions” are paragraphs 11(1), 12(1), 17(2), 18(2), 19(2), 21(3), 22C, 23(2), 23A(2), 24(3), 26(1) and (3), 27(3), 28(2), 29(1), 31(2) and 33(2).

35

No duty of confidentiality or other restriction on disclosure (however imposed) prevents the voluntary disclosure by any person to HMRC of information or documents which the person has reasonable grounds for suspecting will assist HMRC in determining whether there has been a breach of any requirement imposed by or under this Part of this Schedule.

36

(1) HMRC may publish information about—

(a) any arrangements, or proposed arrangements, to which a reference number is allocated under paragraph 22;

(b) where the reference number is allocated in a case within paragraph 22(2), any person who is a promoter in relation to the arrangements or, in the case of proposed arrangements, the proposal;

(i) a promoter in relation to the arrangements or proposed arrangements, or

(ii) otherwise involved in the supply of the arrangements or proposed arrangements.

(2) The information that may be published is (subject to sub-paragraph (4))—

(a) any information relating to arrangements within sub-paragraph (1)(a), or a person within sub-paragraph (1)(b) or (c), that is prescribed information for the purposes of paragraph any provision of this Part;

(b) any ruling of a court or tribunal relating to—

(i) arrangements within sub-paragraph (1)(a);

(ii) a person within sub-paragraph (1)(b), in that person's capacity as a promoter;

(iii) a person within sub-paragraph (1)(c), in that person's capacity as a promoter or a person otherwise involved in the supply of arrangements or proposed arrangements;

(c) the number of persons in any period who enter into transactions forming part of ... arrangements within sub-paragraph (1)(a);

(d) any other information that HMRC considers it appropriate to publish for the purpose of identifying arrangements within sub-paragraph (1)(a) or a person within sub-paragraph (1)(b) or (c).

(3) The information may be published in any manner that HMRC considers appropriate.

(4) No information may be published under this paragraph that identifies a person who enters into a transaction forming part of ... arrangements within sub-paragraph (1)(a).

(4A) No information may be published under this paragraph in respect of a person involved in the supply of arrangements or proposed arrangements where there are reasonable grounds for believing that the person's involvement is limited to activities subject to legal professional privilege.

(5) But where a person within sub-paragraph (1)(b) or (c) is also a person mentioned in sub-paragraph (4), nothing in sub-paragraph (4) is to be taken as preventing the publication under this paragraph of information so far as relating to the person's activities as a promoter or a person involved in the supply of arrangements or proposed arrangements.

(6) Before publishing any information under this paragraph that identifies a person as a person within sub-paragraph (1)(b) or (c), HMRC must—

(a) inform the person that they are considering doing so, and

(b) give the person reasonable opportunity to make representations about whether it should be published.

(7) Where the reference number is allocated in a case within paragraph 22(3)—

(a) information that identifies a person within sub-paragraph (1)(b) or (c) may not be published for the first time after the end of the period of one year beginning with the day on which the reference number is allocated;

(b) no information that identifies a person within sub-paragraph (1)(b) or (c) may be published (or continue to be published) after the end of the period of one year beginning with the day on which it is first published.

(8) In determining a period of one year for the purposes of sub-paragraph (7)(a) or (b), no account is to be taken of any period during which HMRC are prohibited from publishing the information because of proceedings before a court or tribunal.

37

(1) This paragraph applies if—

(a) information about ... arrangements, or proposed ... arrangements, is published under paragraph 36,

(b) at any time after the information is published, a ruling of a court or tribunal is made in relation to tax arrangements, and

(2) A ruling is “relevant” to the arrangements if—

(a) the principles laid down, or reasoning given, in the ruling would, if applied to the arrangements, allow the purported advantage arising from the arrangements in relation to tax, and

(b) the ruling is final.

(3) HMRC must publish information about the ruling.

(4) The information must be published in the same manner as HMRC published the information mentioned in sub-paragraph (1)(a) (and may also be published in any other manner that HMRC considers appropriate).

(5) A ruling is “final” if it is—

(a) a ruling of the Supreme Court, or

(b) a ruling of any other court or tribunal in circumstances where—

(i) no appeal may be made against the ruling,

(ii) if an appeal may be made against the ruling with permission, the time limit for applications has expired and either no application has been made or permission has been refused,

(iii) if such permission to appeal against the ruling has been granted or is not required, no appeal has been made within the time limit for appeals, or

(iv) if an appeal was made, it was abandoned or otherwise disposed of before it was determined by the court or tribunal to which it was addressed.

(6) Where a ruling is final by virtue of sub-paragraph (ii), (iii) or (iv) of sub-paragraph (5)(b), the ruling is to be treated as made at the time when the sub-paragraph in question is first satisfied.

(7) In this paragraph “tax arrangements” means arrangements in respect of which it would be reasonable to conclude (having regard to all the circumstances) that the main purpose, or one of the main purposes, was the obtaining of a tax advantage.

Power to vary certain relevant periods

38

The Commissioners may by regulations amend this Part of this Schedule with a view to altering the definition of “the relevant period” for the purposes of—

paragraph 5(6)

paragraph 11(1)

paragraph 12(1)

paragraph 16(5)

paragraph 17(2)

paragraph 24(3)

paragraph 25(2)

paragraph 27(3)

paragraph 28(3)

paragraph 29(4)

paragraph 30(2))

paragraph 31(4).

PART 2 — Penalties

Penalty for failure to comply with duties under Part 1 (apart from paragraph 26)

39

(1) A person who fails to comply with any of the provisions of Part 1 of this Schedule mentioned in sub-paragraph (2) is liable—

(a) to a penalty not exceeding—

(i) in the case of a failure to comply with paragraph 11(1), 12(1), 17(2), 18(2) , 19 or 22C, £600 for each day during the initial period for which the failure continues (but see also paragraphs 40(4) and 41), and

(ii) in any other case, £5,000, and

(b) if the failure continues after a penalty is imposed under paragraph (a), to a further penalty or penalties not exceeding £600 for each day on which the failure continues after the day on which the penalty under paragraph (a) was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).

(2) Those provisions are—

(a) paragraph 11(1) (duty of promoter in relation to notifiable proposal),

(b) paragraph 12(1) (duty of promoter in relation to notifiable arrangements),

(d) paragraph 18(2) (duty of parties to notifiable arrangements not involving promoter),

(e) paragraph 19 (duty to provide further information requested by HMRC),

(f) paragraph 21 (duty of promoters to provide updated information),

(fa) paragraph 22C (duty to provide further information requested by HMRC: paragraph 22(3) case);

(g) paragraph 23(2) (duty of promoter to notify client of reference number),

(ga) paragraph 23A(2) (duty to notify client of reference number: paragraph 22(3) case)

(h) paragraph 24(3) (duty of client to notify parties of reference number),

(i) paragraph 25(2) (duty of client to provide information to promoter),

(j) paragraph 27(3) (duty of promoter to provide details of clients),

(k) paragraph 28(3) (enquiry following disclosure of client details),

(l) paragraphs 29(4) and 30(2) (duty of promoter to respond to inquiry)

(m) paragraph 31(4) (duty of introducer to give details of persons who have provided information or have been provided with information, and

(n) paragraph 33 (duty to provide additional information).

(3) In this paragraph “the initial period” means the period—

(a) beginning with the relevant day, and

(b) ending with the earlier of the day on which the penalty under sub-paragraph (1)(a)(i) is determined and the last day before the failure ceases.

(4) For the purposes of sub-paragraph (3)(a) “the relevant day” is the day specified in relation to the failure in the following table—

Failure	Relevant day
A failure to comply with paragraph 11(1) or 12(1) in so far as it applies by virtue of an order under paragraph 5	The first day after the end of the relevant period described in paragraph 5(6)
A failure to comply with paragraph 11(1) or 12(1) in so far as it applies by virtue of an order under paragraph 16(2)	The first day after the end of the relevant period (whether that is the period described in sub-paragraph 16(5)(a) or that period as extended by a direction under paragraph 16(5)(b))
Any other failure to comply with sub-paragraph (1) of paragraph 11	The first day after the end of the relevant period described in paragraph 11(2)
Any other failure to comply with sub-paragraph (1) of paragraph 12	The first day after the end of the relevant period described in paragraph 12(2)
A failure to comply with paragraph 17(2)	The first day after the end of the relevant period described in paragraph 17(3)
A failure to comply with paragraph 18(2)	The first day after the latest time by which paragraph 18(2) should have been complied with in the case concerned
A failure to comply with paragraph 19	The first day after the end of the period within which the person must comply with paragraph 19
A failure to comply with paragraph 22C	The first day after the end of the period before the end of which the person must comply with paragraph 22C

40

(1) In the case of a failure to comply with paragraph 11(1), 12(1), 17(2), 18(2) or 19, the amount of the penalty under paragraph 39(1)(a)(i) is to be arrived at after taking account of all relevant considerations.

(2) Those considerations include the desirability of the penalty being set at a level which appears appropriate for deterring the person, or other persons, from similar failures to comply on future occasions having regard (in particular)—

(a) in the case of a penalty for a promoter's failure to comply with paragraph 11(1), 12(1) or 19, to the amount of any fees received, or likely to have been received, by the promoter in connection with the notifiable proposal (or arrangements implementing the notifiable proposal), or with the notifiable arrangements,

(aa) in the case of a penalty for a person's failure to comply with paragraph 22C, to the amount of any fees received, or likely to have been received, by the person in connection with the arrangements, the proposed arrangements or the proposal, and

(b) in the case of a penalty for a relevant person's failure to comply with paragraph 17(2), 18(2) or 19, to the amount of any advantage gained, or sought to be gained, by the person in relation to any tax prescribed under paragraph 3(1)(b) in relation to the notifiable arrangements

(3) In sub-paragraph (2)(b) “relevant person” means a person who enters into any transaction forming part of notifiable arrangements.

(4) If the maximum penalty under paragraph 39(1)(a)(i) appears inappropriately low after taking account of all relevant considerations, the penalty is to be of such amount not exceeding £1 million as appears appropriate having regard to those considerations.

41

(1) This paragraph applies where a failure to comply with a provision mentioned in paragraph 39(2) concerns a proposal or arrangements in respect of which an order has been made under paragraph 4 or 5.

(2) The amounts specified in paragraph 39(1)(a)(i) and (b) are increased to £5,000 in relation to days falling after the end of the period of 11 days beginning with the day on which the order is made.

42

(1) The Treasury may by regulations vary—

(a) any of the sums for the time being specified in paragraph 39(1);

(b) the sum for the time being specified in paragraph 40(4);

(d) the sum for the time being specified in paragraph 41(2).

(2) Regulations under this paragraph may include incidental or transitional provision.

43

Where it appears to an officer of Revenue and Customs that—

(a) a penalty under paragraph 39(1)(a) has been imposed in a case where the maximum penalty is set by paragraph 39(1)(a)(i), and

(b) the maximum penalty was calculated on the basis that the initial period began with a day later than that which the officer considers to be the relevant day,

an officer of Revenue and Customs may commence proceedings for a re-determination of the penalty.

Penalty for failure to comply with duties under paragraph 26

44

(1) A person who fails to comply with—

(a) paragraph 26(1), or

(b) regulations under paragraph 26(3),

is liable to a penalty not exceeding the relevant sum.

(2) The relevant sum is £5,000 in respect of each scheme to which the failure relates unless the person falls within sub-paragraph (3) or (4).

(3) If the person has previously failed to comply with paragraph 26(1) or regulations under paragraph 26(3) on one (and only one) occasion during the period of 36 months ending with the date on which the current failure began, the relevant sum is £7,500 in respect of each scheme to which the current failure relates (whether or not the same as any scheme to which the previous failure relates).

(4) If the person has previously failed to comply with paragraph 26(1) or regulations under paragraph 26(3) on two or more occasions during the period of 36 months ending with the date on which the current failure began, the relevant sum is £10,000 in respect of each scheme to which the current failure relates (whether or not the same as any scheme to which any of the previous failures relates).

(5) In this paragraph “scheme” means any notifiable arrangements.

Penalty proceedings before First-tier tribunal

45

(1) An authorised officer may commence proceedings before the First-tier Tribunal for any penalty under paragraph 39(1)(a).

(2) In sub-paragraph (1) “authorised officer” means an officer of Revenue and Customs authorised by HMRC for the purposes of this paragraph.

(3) Proceedings for a penalty may not be commenced more than 12 months after evidence of facts sufficient to justify the bringing of proceedings comes to the knowledge of HMRC.

(4) If the First-tier Tribunal decide that the penalty is payable by the person—

(a) the penalty is for all purposes to be treated as if it were tax charged in an assessment and due and payable,

(b) the person may appeal to the Upper Tribunal against the decision that the penalty is payable, and

(5) On an appeal under sub-paragraph (4)(b) the Upper Tribunal may, if it appears that no penalty has been incurred, cancel the decision of the First-tier Tribunal.

(6) On an appeal under sub-paragraph (4)(c) the Upper Tribunal may—

(a) affirm the decision of the First-tier Tribunal as to the amount of the penalty, or

(b) substitute for that decision a decision that the First-tier Tribunal had power to make.

Assessment of penalties under paragraph 39(1)(b) or 44

46

(1) Where a person is liable to a penalty under paragraph 39(1)(b) or 44 an authorised officer may assess the amount due by way of a penalty.

(2) An assessment may not be made more than 12 months after evidence of facts sufficient to justify the making of the assessment first comes to the knowledge of HMRC.

(3) A notice of an assessment under sub-paragraph (1) stating—

(a) the date on which it is issued, and

(b) the time within which an appeal against the assessment may be made,

must be served on the person liable to the penalty.

(4) After the notice has been served the assessment may not be altered except in accordance with this paragraph or on appeal.

(5) If it is discovered by an authorised officer that the amount of a penalty assessed under this paragraph is or has become insufficient the officer may make an assessment in a further amount so that the penalty is set at the amount which, in the officer's opinion, is correct or appropriate.

(6) A penalty imposed by a decision under this paragraph—

(a) is due and payable at the end of the period of 30 days beginning with the date of the issue of the notice of the decision, and

(b) is to be treated for all purposes as if it were tax charged in an assessment and due and payable.

(7) In this paragraph “authorised officer” means an officer of Revenue and Customs authorised by HMRC for the purposes of this paragraph.

47

(1) Where a person (P) is served with notice of an assessment under paragraph 46—

(a) P may appeal against the decision that a penalty is payable by P, and

(b) P may appeal against the decision as to the amount of the penalty.

(2) An appeal under sub-paragraph (1) is to be treated for procedural purposes in the same way as an appeal against an assessment to the relevant tax (including by the application of any provision about the bringing of an 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)

(3) Sub-paragraph (2) does not apply—

(a) so as to require P to pay a penalty before an appeal under sub-paragraph (1) is determined, or

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

(4) On an appeal under sub-paragraph (1)(a) the tribunal may affirm or cancel the decision that a penalty is payable by P.

(5) On an appeal under sub-paragraph (1)(b) the tribunal may—

(a) affirm the decision as to the amount of the penalty, or

(b) substitute for that decision another decision that the authorised officer had power to make.

(6) In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of sub-paragraph (2)).

Reasonable excuse

48

(1) Liability to a penalty under this Part of this Schedule does not arise in relation to a particular failure to comply if the person concerned (P) satisfies HMRC or the relevant tribunal (as the case may be) that there is a reasonable excuse for the failure.

(2) For this purpose—

(a) an insufficiency of funds is not a reasonable excuse, unless attributable to events outside P's control,

(b) where P relied on any other person to do anything, that cannot be a reasonable excuse unless P took reasonable care to avoid the failure,

(c) where P had a reasonable excuse but the excuse has ceased, P is to be treated as continuing to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased, and

(d) reliance on advice is to be taken automatically not to be a reasonable excuse if the advice was addressed to, or was given to, a person other than P or takes no account of P's individual circumstances.

49

(1) The making of an order under paragraph 4 or 5 against P does not of itself mean that P either did or did not have a reasonable excuse for non- compliance before the order was made.

(2) Where an order is made under paragraph 4 or 5 then for the purposes of paragraph 48—

(a) the person identified in the order as the promoter of the proposal or arrangements cannot, in respect of any time after the end of the prescribed period mentioned in paragraph 41, rely on doubt as to notifiability as a reasonable excuse for failure to comply with paragraph 11(1) or 12(1), and

(b) any delay in compliance with that provision after the end of that period is not capable of being a reasonable excuse unless attributable to something other than doubt as to notifiability.

50

(1) Where a person fails to comply with—

(a) paragraph 17(2) and the promoter for the purposes of paragraph 17 is a monitored promoter, or

(b) paragraph 18(2) and the arrangements for the purposes of paragraph 18 are arrangements of a monitored promoter,

then for the purposes of paragraph 48 legal advice which the person took into account is to be disregarded in determining whether the person had a reasonable excuse, if the advice was given or procured by that monitored promoter.

(2) In determining for the purpose of paragraph 48 whether or not a person who is a monitored promoter had a reasonable excuse for a failure to do something, reliance on legal advice is to be taken automatically not to constitute a reasonable excuse if either—

(a) the advice was not based on a full and accurate description of the facts, or

(b) the conclusions in the advice that the person relied on were unreasonable.

(3) In this paragraph “monitored promoter” means a person who is a monitored promoter for the purposes of Part 5 of FA 2014

PART 3 — Consequential amendments

VATA 1994

51

In section 77(4A) of VATA 1994 (cases in which the time allowed for assessment is 20 years), in paragraph (d) after “11A” insert “ or an obligation under paragraph 17(2) or 18(2) of Schedule 17 to FA 2017 ”.

Promoters of tax avoidance schemes

52

Part 5 of FA 2014 (promoters of tax avoidance schemes) is amended as follows.

53

(1) Section 281A (VAT: meaning of “tax advantage”) is amended as follows.

(2) In the heading after “VAT” insert “ and other indirect taxes ”.

(3) In subsection (1)—

(a) in paragraph (a) after “VAT” insert “ and other indirect taxes ”, and

(b) in paragraph (b) for the words from “in paragraph 1” to the end substitute “for VAT in paragraph 6, and for other indirect taxes in paragraph 7, of Schedule 17 to FA 2017 (disclosure of tax avoidance schemes: VAT and other indirect taxes).

(4) In subsection (3) after “value added tax” (in both places) insert “ or other indirect taxes ”.

(5) After subsection (3) insert—

(4) In this section “indirect tax” has the same meaning as in Schedule 17 to FA 2017.

54

(1) Schedule 34A (defeated arrangements) is amended as follows.

(2) In paragraph 2(4) after “schemes)” insert “or paragraph 22 of Schedule 17 to FA 2017 (disclosure of avoidance schemes: VAT and other indirect taxes).

(3) In paragraph 14—

(a) in sub-paragraph (1)(a) after “VAT” insert “ or other indirect tax ”, and

(b) in sub-paragraphs (1)(a) and (b), (2) and (3) omit “taxable”.

(4) After paragraph 26 insert—

(26A) (1) For the purposes of this Schedule arrangements are “disclosable VAT or other indirect tax arrangements” at any time if at that time— (a) the arrangements are disclosable Schedule 11A arrangements, or (b) sub-paragraph (2) applies. (2) This sub-paragraph applies if a person— (a) has provided information in relation to the arrangements under paragraph 12(1), 17(2) or 18(2) of Schedule 17 to FA 2017, or (b) has failed to comply with any of those provisions in relation to the arrangements. (3) But for the purposes of this Schedule arrangements in respect of which HMRC have given notice under paragraph 23(6) of that Schedule (notice that promoters not under duty to notify client of reference number) are not to be regarded as disclosable VAT or other indirect tax arrangements. (4) For the purposes of sub-paragraph (2) a person who would be required to provide information under paragraph 12(1) of that Schedule— (a) but for the fact that the arrangements implement a proposal in respect of which notice has been given under paragraph 11(1) of that Schedule, or (b) but for paragraph 13, 14 or 15 of that Schedule, is treated as providing the information at the end of the period referred to in paragraph 12(1).

(5) In the heading before paragraph 27, after “ “disclosable” insert “ Schedule 11A ”.

(6) In paragraph 27—

(a) for “this Schedule” substitute “ paragraph 26A ”, and

(b) after “ “disclosable” insert “ Schedule 11A ”.

(7) In the heading before paragraph 28 for “and 27” substitute “ to 27 ”.

(8) In paragraph 28(1) after “26(1)(a)” insert “26A(2)(a)

Serial tax avoidance

55

(1) Schedule 18 to FA 2016 (serial tax avoidance) is amended as follows.

(2) In paragraph 4 (meaning of “tax”)—

(a) number the current text as sub-paragraph (1) of that paragraph,

(b) in that sub-paragraph (1), in paragraph (j) after “VAT” insert” “ and indirect taxes ”, and

(2) For the purposes of this Schedule “indirect tax” means any of the following— - insurance premium tax - general betting duty - pool betting duty - remote gaming duty - machine games duty - gaming duty - lottery duty - bingo duty - air passenger duty - hydrocarbon oils duty - tobacco products duty - duties on spirits, beer, wine, made-wine and cider - soft drinks industry levy - aggregates levy - landfill tax - climate change levy - customs duties.

(3) Before paragraph 9 (meaning of “disclosable VAT arrangements”) insert—

(8A) (1) For the purposes of this Schedule arrangements are “disclosable VAT arrangements” at any time if at that time sub-paragraph (2) or (3) applies. (2) This sub-paragraph applies if the arrangements are disclosable Schedule 11A VAT arrangements (see paragraph 9). (3) This paragraph applies if— (a) the arrangements are notifiable arrangements for the purposes of Schedule 17 to FA 2017, (b) the main benefit, or one of the main benefits that might be expected to arise from the arrangements is the obtaining of a tax advantage in relation to VAT (within the meaning of paragraph 6 of that Schedule), and (c) a person— (i) has provided information about the arrangements under paragraph 12(1), 17(2) or 18(2) of that Schedule, or (ii) has failed to comply with any of those provisions in relation to the arrangements. (4) But for the purposes of this Schedule arrangements in respect of which HMRC have given notice under paragraph 23(6) of Schedule 17 (notice that promoters not under duty to notify client of reference number) are not to be regarded as “disclosable VAT arrangements”. (5) For the purposes of sub-paragraph (3)(c) a person who would be required to provide information under paragraph 12(1) of Schedule 17 to FA 2017— (a) but for the fact that the arrangements implement a proposal in respect of which notice has been given under paragraph 11(1) of that Schedule, or (b) but for paragraph 13, 14 or 15 of that Schedule, is treated as providing the information at the end of the period referred to in paragraph 12(1).

(4) In the heading before paragraph 9 after “ “Disclosable” insert “ Schedule 11A ”.

(5) In paragraph 9—

(a) for “this Schedule” substitute “ paragraph 8A ”, and

(b) after “ “disclosable” insert “ Schedule 11A ”.

(6) After paragraph 9 insert—

(9A) (1) For the purposes of this Schedule arrangements are “disclosable indirect tax arrangements” at any time if at that time— (a) the arrangements are notifiable arrangements for the purposes of Schedule 17 to FA 2017, (b) the main benefit, or one of the main benefits that might be expected to arise from the arrangements is the obtaining of a tax advantage in relation to an indirect tax other than VAT (within the meaning of paragraph 7 of that Schedule), and (c) a person— (i) has provided information about the arrangements under paragraph 12(1), 17(2) or 18(2) of that Schedule, or (ii) has failed to comply with any of those provisions in relation to the arrangements. (2) But for the purposes of this Schedule arrangements in respect of which HMRC have given notice under paragraph 23(6) of Schedule 17 to FA 2016 (notice that promoters not under duty to notify client of reference number) are not to be regarded as “disclosable indirect tax arrangements”. (3) For the purposes of sub-paragraph (1)(c) a person who would be required to provide information under paragraph 12(1) of Schedule 17— (a) but for the fact that the arrangements implement a proposal in respect of which notice has been given under paragraph 11(1) of that Schedule, or (b) but for paragraph 13, 14 or 15 of that Schedule, is treated as providing the information at the end of the period referred to in paragraph 12(1).

(7) In the heading before paragraph 10 (meaning of “failure to comply”) for “and 9” substitute “ to 9A ”.

(8) In paragraph 10(1) for “or 9(a)” substitute “ , 8A(2)(c), 9(a) or 9A(1)(c) ”.

(9) In paragraph 11(1) (meaning of “relevant defeat”) for “E” substitute “ F ”.

(10) After paragraph 16 (condition E) insert—

(16A) (1) Condition F is that— (a) the arrangements are indirect tax arrangements, (b) P has relied on the arrangements (see sub-paragraph (2), (c) the arrangements have been counteracted, and (d) the counteraction is final. (2) For the purpose of sub-paragraph (1) P relies on the arrangements if— (a) P makes a return, claim, declaration or application for approval on the basis that a relevant tax advantage arises, or (b) P fails to discharge a relevant obligation (“the disputed obligation”) and there is reason to believe that P's failure to discharge that obligation is connected with the arrangements. (3) For the purposes of sub-paragraph (2) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable P to obtain. (4) For the purposes of sub-paragraph (2) an obligation is a relevant obligation if the arrangements might be expected to have the result that the obligation does not arise. (5) For the purposes of this paragraph the arrangements are “counteracted” if— (a) adjustments, other than taxpayer emendations, are made in respect of P's tax position — (i) on the basis that the whole or part of the relevant tax advantage mentioned in sub-paragraph (2)(a) does not arise, or (ii) on the basis that the disputed obligation does (or did) arise, or (b) an assessment to tax is made, or any other action is taken by HMRC, on the basis mentioned in paragraph (a)(i) or (ii) (otherwise than by way of an adjustment). (6) For the purposes of this paragraph a “counteraction” is final when the adjustments, assessment or action in question, and any amounts arising from the adjustments, assessment or action, can no longer be varied, on appeal or otherwise. (7) For the purposes of sub-paragraph (1) the time at which it falls to be determined whether or not the arrangements are disclosable indirect tax arrangements is when the counteraction becomes final. (8) The following are “taxpayer emendations” for the purposes of sub-paragraph (5)— (a) an adjustment made by P at a time when P had no reason to believe that HMRC had begun or were about to begin enquiries into P's affairs in relation to the tax in question; (b) an adjustment made by HMRC with respect to P's tax position (whether by way of an assessment or otherwise) as a result of a disclosure by P which meets the conditions in sub-paragraph (9). (9) The conditions are that the disclosure— (a) is a full and explicit disclosure of an inaccuracy in a return or other document or of a failure to comply with an obligation, and (b) was made at a time when P had no reason to believe that HMRC were about to begin enquiries into P's affairs in relation to the tax in question.

(11) In paragraph 17 (annual information notices)—

(a) in sub-paragraph (3)(a) for “or election,” insert “ election, declaration or application for approval, ”,

(b) in sub-paragraphs (3)(b), (4) and (5)(a) for “DOTAS arrangements or VAT” substitute “ disclosable ”,

(d) after sub-paragraph (11) insert—

(12) In this paragraph “disclosable arrangements” means any of the following— (a) DOTAS arrangements, (b) disclosable VAT arrangements, and (c) disclosable indirect tax arrangements.

(12) In the heading before paragraph 28 (exclusion of VAT from Part 4 of Schedule) after “VAT” insert “ and indirect taxes ”.

(13) In paragraph 28 after “VAT” insert “ or any other indirect tax ”.

(14) In paragraph 32 (value of counteracted advantage: basic rule for taxes other than VAT)—

(a) in sub-paragraph (1) for “or C” substitute “ C or F ” and after paragraph (c) insert

; (d) in the case of a relevant defeat incurred by virtue of Condition F, the additional amount due or payable in respect of tax as a result of the counteraction mentioned in paragraph 16A(1)(d).

, and

(b) in sub-paragraph (2)(b) for “or (c)” substitute “ (c) or (d) ”.

(15) In paragraph 35 (meaning of “the counteracted advantage” in paragraphs 33 and 34) in sub-paragraph (1) after paragraph (c) insert

; (d) in relation to a relevant defeat incurred by virtue of Condition F, means any tax advantage in respect of which the counteraction mentioned in paragraph 16A(1)(c) is made.

(16) In paragraph 43 (paragraph 42: meaning of “the relevant failure”) after sub-paragraph (7) insert—

(8) In relation to a relevant defeat incurred by virtue of Condition F, “the relevant failure” means the failures or inaccuracies as a result of which the adjustments, assessments, or other actions mentioned in paragraph 16A(5) are required.

(17) In paragraph 55 (time of “use” of defeated arrangements) after sub-paragraph (8) insert—

(8A) If the person incurs the relevant defeat by virtue of Condition F, the person is treated as having “used” the arrangements on the following dates— (a) the filing date of any return made by the person on the basis mentioned in paragraph 16A(2)(a); (b) the date on which the person makes any claim, declaration or application for approval; (c) the date of any failure by the person to comply with a relevant obligation (as defined in paragraph 16A(4)).

(18) In paragraph 58(1) (interpretation)—

(a) after the definition of “contract settlement” insert—

“disclosable indirect tax arrangements” is to be interpreted in accordance with paragraph 9A; “disclosable Schedule 11A VAT arrangements is to be interpreted in accordance with paragraph 9;

(b) after the definition of “HMRC” insert—

“indirect tax” has the meaning given by paragraph 4(2);

(d) in the definition of “tax” for “4” substitute “ 4(1) ”.

PART 4 — Supplemental

Regulations

56

(1) Any power of the Treasury or the Commissioners to make regulations under this Schedule is exercisable by statutory instrument.

(2) Regulations made under any such power may make different provision for different cases and may contain transitional provisions and savings.

(3) A statutory instrument containing regulations made by the Treasury under paragraph 2(2) or 42(1) may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(4) Any other statutory instrument containing regulations made under this Schedule, if made without a draft having been approved by a resolution of the House of Commons, is subject to annulment in pursuance of a resolution of the House of Commons.

Interpretation

57

In this Schedule—

“arrangements” includes any scheme, transaction or series of transactions;

“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;

“company” has the meaning given by section 1121 of the Corporation Tax Act 2010;

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

“indirect tax” has the meaning given by paragraph 2(1);

“introducer” is to be construed in accordance with paragraph 9;

“makes a firm approach” has the meaning given by paragraph 10(1);

“makes a marketing contact” has the meaning given by paragraph 10(2);

“marketing contact” has the meaning give by paragraph 10(2);

“notifiable arrangements” has the meaning given by paragraph 3(1);

“notifiable proposal” has the meaning given by paragraph 3(3);

“prescribed” (except in or in references to paragraph 3(1)(a)), means prescribed by regulations made by HMRC;

“promoter” is to be construed in accordance with paragraph 8;

“reference number” means a reference number allocated under paragraph 22;

“TCEA 2007” means the Tribunals, Courts and Enforcement Act 2007;

“tax advantage” means a tax advantage within the meaning of—paragraph 6 (in relation to VAT), orparagraph 7 (in relation to indirect taxes other than VAT);

“trade” includes every venture in the nature of a trade;

“tribunal” means the First-tier tribunal, or where determined by or under Tribunal Procedure Rules, the Upper Tribunal;

“working day” means a day which is not a Saturday or a Sunday, Christmas Day, Good Friday or a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom.

SCHEDULE 18

PART 1 — Liability for penalty for failure to correct

Failure to correct relevant offshore tax non-compliance

1

A penalty is payable by a person who—

(a) has any relevant offshore tax non-compliance to correct at the end of the tax year 2016-17, and

(b) fails to correct the relevant offshore tax non-compliance within the period beginning with 6 April 2017 and ending with 30 September 2018 (referred to in this Schedule as “the RTC period”).

Main definitions: general

2

Paragraphs 3 to 13 have effect for the purposes of this Schedule.

“Relevant offshore tax non-compliance”

3

(1) At the end of the 2016-17 tax year a person has “relevant offshore tax non-compliance” to correct if—

(a) Conditions A and B are satisfied in respect of any offshore tax non-compliance committed by that person on or before 5 April 2017 (“the original offshore tax non-compliance”), and

(b) Condition C will be satisfied on the relevant date (see paragraph 6).

(2) Where the original offshore tax non-compliance committed by a person has been corrected in part by the end of the tax year 2016-17, the person's “relevant offshore tax non-compliance” is the uncorrected part of the original offshore tax non-compliance.

4

Condition A is that the original offshore tax non-compliance has not been fully corrected before the end of the tax year 2016-17 (see paragraph 13).

5

Condition B is that—

(a) the original offshore tax non-compliance involved a potential loss of revenue when it was committed, and

(b) if the original offshore tax non-compliance has been corrected in part by the end of the tax year 2016-17, the uncorrected part at that time involved a potential loss of revenue.

6

(1) Condition C is that on the relevant date it is lawful, on the assumptions set out in sub-paragraph (2), for HMRC to assess the person concerned to any tax the liability to which would have been disclosed to or discovered by HMRC if on that date—

(a) where none of the original offshore tax non-compliance was corrected before the end of the 2016-17 tax year, HMRC were aware of the information missing as a result of the failure to correct that tax non-compliance, or

(b) where the original offshore tax non compliance was corrected in part before that time, HMRC were aware of the information missing as a result of the failure to correct the rest of that tax non-compliance.

(2) The assumptions are—

(a) that paragraph 26 is to be disregarded, and

(b) where the tax at stake is inheritance tax, that the relevant offshore tax non-compliance is not corrected before the relevant date

(3) In this paragraph “the relevant date” is—

(a) where the tax at stake is income tax or capital gains tax, 6 April 2017, and

(b) where the tax at stake is inheritance tax, the day after the day on which this Act is passed.

“Offshore tax-non compliance” etc

7

(1) “Offshore tax non-compliance” means tax non-compliance which involves an offshore matter or an offshore transfer, whether or not it also involves an onshore matter.

(2) Tax non-compliance “involves an onshore matter” if and to the extent that it does not involve an offshore matter or an offshore transfer.

(3) For the meaning of “involves an offshore matter or an offshore transfer” (in relation to the different descriptions of tax non-compliance) see paragraphs 9 to 11.

“Tax non-compliance”

8

(1) “Tax non-compliance” means any of the following—

(a) a failure to comply on or before the filing date with an obligation under section 7 of TMA 1970 to give notice of chargeability to income tax or capital gains tax,

(b) a failure to comply on or before the filing date with an obligation to deliver to HMRC a return or other document which is listed in sub-paragraph (3), or

(c) delivering to HMRC a return or other document which is listed in sub-paragraph (3) or (4) and contains an inaccuracy which amounts to, or leads to—

(i) an understatement of a liability to tax,

(ii) a false or inflated statement of a loss, or

(iii) a false or inflated claim to repayment of tax.

(2) In sub-paragraph (1)—

(a) “filing date”, in relation to a notice of chargeability or a return or other document, means the date by which it is required to be given, made or delivered to HMRC,

(b) “loss” includes a charge, expense, deficit and any other amount which may be available for, or relied on to claim, a deduction or relief, and

(3) The documents relevant for the purposes of both of paragraphs (b) and (c) of sub-paragraph (1) are (so far as they relate to the tax or taxes shown in the first column)—

Tax to which document relates	Document
Income tax or capital gains tax	Return, accounts, statement or document required under section 8(1) of TMA 1970 (personal return)
Income tax or capital gains tax	Return, accounts, statement or document required under section 8A(1) of TMA 1970 (trustee's return)
Income tax	Return, accounts, statement or document required under section 12AA(2) or (3) of TMA 1970 (partnership return)
Income tax	Return under section 254 of FA 2004 (pension schemes)
Income tax	Particulars or documents required under regulation 12 of the Retirement Benefits Schemes (Information Powers) Regulations 1995 (SI 1995/3101) (information relating to pension schemes)
Capital gains tax	NRCGT return under section 12ZB of TMA 1970
Inheritance tax	Account under section 216 or 217 of IHTA 1984.

(4) The documents relevant for the purposes only of paragraph (c) of sub-paragraph (1) are (so far as they relate to the tax or taxes shown in the first column)—

Tax to which document relates	Document
Income tax or capital gains tax	Return, statement or declaration in connection with a claim for an allowance, deduction or relief
Income tax or capital gains tax	Accounts in connection with ascertaining liability to tax
Income tax or capital gains tax	Statement or declaration in connection with a partnership return
Income tax or capital gains tax	Accounts in connection with a partnership return
Inheritance tax	Information or document under regulations under section 256 of IHTA 1984
Inheritance tax	Statement or declaration in connection with a deduction, exemption or relief.
Income tax, capital gains tax or inheritance tax	Any other document given to HMRC by a person (“P”) which is likely to be relied on by HMRC to determine, without further inquiry, a question about—P's liability to tax;payments by P by way of or in connection with tax;any other payment by P (including penalties);repayments, or any other kind of payment or credit, to P.

“Involves an offshore matter” and “involves an offshore transfer”

9

(1) This paragraph applies to any tax non-compliance consisting of a failure to comply with an obligation under section 7 of TMA 1970 to notify chargeability to income tax or capital gains tax.

(2) The tax non-compliance “involves an offshore matter” if the potential loss of revenue is charged on or by reference to—

(a) income arising from a source in a territory outside the UK,

(b) assets situated or held in a territory outside the UK,

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

(3) The tax non-compliance “involves an offshore transfer” if—

(a) it does not involve an offshore matter, and

(b) the applicable condition is satisfied (see sub-paragraphs (4) and (5)).

(4) Where the tax at stake is income tax the applicable condition is satisfied if the income on or by reference to which tax is charged, or any part of the income—

(a) was received in a territory outside the UK, or

(b) was transferred on or before 5 April 2017 to a territory outside the UK.

(5) Where the tax at stake is capital gains tax, the applicable condition is satisfied if the proceeds of the disposal on or by reference to which the tax is charged, or any part of the proceeds—

(a) were received in a territory outside the UK, or

(b) were transferred on or before 5 April 2017 to a territory outside the UK.

(6) In the case of a transfer falling within sub-paragraph (4)(b) or (5)(b), references to the income or proceeds transferred are to be read as including references to any assets derived from or representing the income or proceeds.

(7) In this paragraph and paragraphs 10 and 11 “assets” has the meaning given in section 21(1) of TCGA 1992, but also includes sterling.

10

(1) This paragraph applies where—

(a) any tax non-compliance by a person consists of a failure to comply with an obligation to deliver a return or other document, and

(b) a complete and accurate return or other document would have included information that would have enabled or assisted HMRC to assess the person's liability to tax.

(2) The tax non-compliance “involves an offshore matter” if the liability to tax that would have been shown in the return or other document is or includes a liability to tax charged on or by reference to—

(a) income arising from a source in a territory outside the UK,

(b) assets situated or held in a territory outside the UK,

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

(3) Where the tax at stake is inheritance tax, assets are treated for the purposes of sub-paragraph (2) as situated or held in a territory outside the UK if they are so situated or held immediately after the transfer of value by reason of which inheritance tax becomes chargeable.

(4) The tax non-compliance “involves an offshore transfer” if—

(a) it does not involve an offshore matter, and

(b) the applicable condition is satisfied in respect of the liability to tax that would have been shown by the return or other document (see sub-paragraphs (5) to (7)).

(5) Where the tax at stake is income tax the applicable condition is satisfied if the income on or by reference to which tax is charged, or any part of the income—

(a) was received in a territory outside the UK, or

(b) was transferred on or before 5 April 2017 to a territory outside the UK.

(6) Where the tax at stake is capital gains tax, the applicable condition is satisfied if the proceeds of the disposal on or by reference to which the tax is charged, or any part of the proceeds—

(a) was received in a territory outside the UK, or

(b) was transferred on or before 5 April 2017 to a territory outside the UK.

(7) Where the liability to tax which would have been shown in the document is a liability to inheritance tax, the applicable condition is satisfied if—

(a) the disposition that gives rise to the transfer of value by reason of which the tax becomes chargeable involves a transfer of assets, and

(b) after that disposition but on or before 5 April 2017 the assets, or any part of the assets, are transferred to a territory outside the UK.

(8) In the case of a transfer falling within sub-paragraph (5)(b), (6)(b) or (7)(b), references to the income or proceeds transferred are to be read as including references to any assets derived from or representing the income or proceeds.

11

(1) This paragraph applies to any tax non-compliance by a person if—

(a) the tax non-compliance consists of delivering or giving HMRC a return or other document which contains an inaccuracy, and

(b) the inaccuracy relates to information that would have enabled or assisted HMRC to assess the person's liability to tax.

(2) The tax non-compliance to which this paragraph applies “involves an offshore matter” if the information that should have been given in the tax document relates to—

(a) income arising from a source in a territory outside the UK,

(b) assets situated or held in a territory outside the UK,

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

(3) Where the tax at stake is inheritance tax, assets are treated for the purposes of sub-paragraph (2) as situated or held in a territory outside the UK if they are so situated or held immediately after the transfer of value by reason of which inheritance tax becomes chargeable.

(4) Tax non-compliance to which this paragraph applies “involves an offshore transfer” if—

(a) it does not involve an offshore matter, and

(b) the applicable condition is satisfied in respect of the liability to tax that would have been shown by the return or other document (see sub-paragraphs (5) to (7)).

(5) Where the tax at stake is income tax the applicable condition is satisfied if the income on or by reference to which the tax is charged, or any part of the income—

(a) was received in a territory outside the UK, or

(b) was transferred on or before 5 April 2017 to a territory outside the UK.

(6) Where the tax at stake is capital gains tax, the applicable condition is satisfied if—

(a) the information that should have been given in the tax document relates to the proceeds of the disposal on or by reference to which the tax is charged, and

(b) the proceeds, or any part of the proceeds—

(i) were received in a territory outside the UK, or

(ii) were transferred on or before 5 April 2017 to a territory outside the UK.

(7) Where the tax at stake is inheritance tax, the applicable condition is satisfied if—

(a) the information that should have been given in the tax document relates to the disposition that gives rise to the transfer of value by reason of which the tax becomes payable relates to a transfer of assets, and

(b) after that disposition but on or before 5 April 2017 the assets or any part of the assets are transferred to a territory outside the UK.

(8) In the case of a transfer falling within sub-paragraph (5)(b), (6)(b) or (7)(b), references to the income, proceeds or assets transferred are to be read as including references to any assets derived from or representing the income, proceeds or assets.

“Tax”

12

(1) References to “tax” are (unless in the context the reference is more specific) to income tax, capital gains tax or inheritance tax.

(2) References 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).

(3) In sub-paragraph (2) “company” has the same meaning as in TCGA 1992.

Correcting offshore tax non-compliance

13

(1) This paragraph sets out how offshore tax non-compliance may be corrected.

(2) References to the correction of offshore tax non-compliance of any description are to the taking of any action specified in this paragraph as a means of correcting offshore tax non-compliance of that description.

(3) Offshore tax non-compliance consisting of a failure to notify chargeability may be corrected by—

(a) giving the requisite notice to HMRC (unless before doing so the person has received a notice requiring the person to make and deliver a tax return) and giving HMRC the relevant information by any means mentioned in paragraph (b),

(b) giving HMRC the relevant information—

(i) by making and delivering a tax return,

(ii) using the digital disclosure service or any other service provided by HMRC as a means of correcting tax non-compliance,

(iii) communicating it to an officer of Revenue and Customs in the course of an enquiry into the person's tax affairs, or

(iv) using a method agreed with an officer of Revenue and Customs.

(4) In sub-paragraph (3) “relevant information” means information relating to offshore tax that—

(a) had the requisite notice been given in time and the person given a notice to make and deliver a tax return, would have been required to be included in the tax return, and

(b) would have enabled or assisted HMRC to calculate the offshore tax due.

(5) Offshore tax non-compliance consisting of a failure to make or deliver a return or other document may be corrected by giving HMRC the relevant information by—

(a) making or delivering the requisite return or document,

(b) using the digital disclosure service or any other service provided by HMRC as a means of correcting tax non-compliance,

(d) using a method agreed with an officer of Revenue and Customs.

(6) In subsection (5) “relevant information” means information relating to offshore tax that—

(a) should have been included in the return or other document, and

(b) would have enabled or assisted HMRC to calculate the offshore tax due.

(7) Offshore tax non-compliance consisting of making and delivering a return or other document containing an inaccuracy may be corrected by giving HMRC the relevant information by—

(a) in the case of an inaccurate tax document, amending the document or delivering a new document,

(b) using the digital disclosure service or any other service provided by HMRC as a means of correcting tax non-compliance,

(d) using a method agreed with an officer of Revenue and Customs.

(8) In sub-paragraph (7) “relevant information” means information relating to offshore tax that—

(a) should have been included in the return but was not (whether due to an omission or the giving of inaccurate information), and

(b) would have enabled or assisted HMRC to calculate the offshore tax due.

(9) In this paragraph “offshore tax”, in relation to any offshore tax non-compliance, means tax corresponding to the offshore PLR in respect of the non-compliance.

PART 2 — Amount of penalty

Amount of penalty

14

(1) The penalty payable under paragraph 1 is 200% of the offshore PLR attributable to the uncorrected offshore tax non-compliance (subject to any reduction under a provision of this Part of this Schedule).

(2) In this Part of this Schedule “the uncorrected offshore tax non-compliance” means—

(a) the relevant offshore tax non-compliance, in a case where none of it is corrected within the RTC period, or

(b) so much of the relevant offshore tax non-compliance as has not been corrected within the RTC period, in a case where part of it is corrected within that period.

Offshore PLR

15

(1) In this Schedule “offshore PLR”, in relation to any offshore tax non-compliance means the potential loss of revenue attributable to that non-compliance, to be determined as follows.

(2) The potential lost revenue attributable to any offshore tax non-compliance is (subject to sub-paragraphs (5) and (6)) —

(a) if the non-compliance is a failure to notify chargeability, the potential lost revenue under the applicable provisions of paragraph 7 of Schedule 41 to FA 2008 (or, where the original offshore tax non-compliance took place before 1 April 2010, the amount referred to in section 7(8) of TMA 1970),

(b) if the non-compliance is a failure to deliver a return or other document, the amount of the liability to tax under the applicable provisions of paragraph 24 of Schedule 55 to FA 2009 or of paragraph 11 of Schedule 25 to FA 2021, as the case may be (or, where the original offshore tax non-compliance took place before 1 April 2011, the amount of liability to tax that would have been shown in the return as defined in section 93(9) of TMA 1970), and

(c) if the non-compliance is delivering a return or other document containing an inaccuracy, the potential lost revenue under the applicable provisions of paragraphs 5 to 8 of Schedule 24 to FA 2007 (or, where the original offshore tax non-compliance took place before 1 April 2008, the difference described in section 95(2) of TMA 1970).

(3) In its application for the purposes of sub-paragraph (2)(c) above, paragraph 6 of Schedule 24 to FA 2007 has effect as if—

(a) for sub-paragraph (1) there were substituted—

(1) Where— (a) P is liable to a penalty in respect of two or more inaccuracies (each being an inaccuracy in a return or other document listed in paragraph 8(3) or (4) of Schedule 18) to F(No.2)A 2017) in relation to a tax year or, in the case of inheritance tax, a single transfer of value, (b) in relation to any one (or more than one) of those inaccuracies, the delivery of the return or other document containing it constitutes offshore tax non-compliance, and (c) the calculation of potential lost revenue attributable to each of those inaccuracies depends on the order in which they are corrected, the potential lost revenue attributable to any offshore tax non-compliance constituted by any one of those inaccuracies is to be taken to be such amount as is just and reasonable. (1A) In sub-paragraph (1) “offshore tax non-compliance” has the same meaning as in Schedule 18 to F(No2)A 2017.

; and

(b) in sub-paragraph (4), for paragraphs (b) to (d) there were substituted—

(b) other understatements.

(4) In sub-paragraphs (5) and (6) “combined tax non-compliance” is tax non-compliance that—

(a) involves an offshore matter or an offshore transfer, but

(b) also involves an onshore matter.

(5) Any combined tax non-compliance is to be treated for the purposes of this Schedule as if it were two separate acts of tax non-compliance, namely—

(a) the combined tax non-compliance so far as it involves an offshore matter or an offshore transfer (which is then offshore tax non-compliance within the meaning of this Schedule), and

(b) the combined tax non-compliance so far as it involves an onshore matter.

(6) The potential lost revenue attributable to the offshore tax non-compliance referred to in sub-paragraph (5)(a) is to be taken to be such share of the potential lost revenue attributable to the combined tax non-compliance as is just and reasonable.

Reduction of penalty for disclosure etc by person liable to penalty

16

(1) This paragraph provides for a reduction in a penalty under paragraph 1 for any uncorrected relevant offshore tax non-compliance if the person (“P”) who is liable to the penalty discloses any matter mentioned in sub-paragraph (2) that is relevant to the non-compliance or its correction or to the assessment or enforcement of the offshore tax attributable to it.

(2) The matters are—

(a) chargeability to income tax or capital gains tax (where the tax non-compliance is a failure to notify chargeability),

(b) a missing tax return,

(d) a supply of false information or a withholding of information, or

(e) a failure to disclose an under-assessment.

(3) A person discloses a matter for the purposes of this paragraph only 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),

(c) informing HMRC of any person who acted as an enabler of the relevant offshore tax non-compliance or the failure to correct it, and

(d) allowing HMRC access to records—

(i) for any reasonable purpose connected with resolving the matter (for example for the purpose of ensuring that an inaccuracy in a document is fully corrected), and

(ii) for the purpose of ensuring that HMRC can identify all persons who may have acted as an enabler of the relevant offshore tax non-compliance or the failure to correct it.

(4) Where a person liable to a penalty under paragraph 1 discloses a matter HMRC must reduce the penalty to one that reflects the quality of the disclosure.

(5) But the penalty may not be reduced below 100% of the offshore PLR.

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

(7) For the purposes of sub-paragraph (3) a person “acted as an enabler” of relevant offshore tax non-compliance by another if the person encouraged, assisted or otherwise facilitated the conduct by the other person that constituted the offshore tax non-compliance.

17

(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

18

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

(a) assess the penalty,

(b) notify the person, and

(i) the uncorrected relevant offshore tax non-compliance to which the penalty relates, and

(ii) the tax period to which that offshore tax non-compliance relates.

(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),

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

(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 offshore 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 19.

19

(1) An assessment of a penalty under paragraph 1 in respect of uncorrected relevant offshore tax non-compliance must be made before the end of the relevant period for that non-compliance.

(2) If the non-compliance consists of a failure to notify chargeability, the relevant period is the period of 12 months beginning with—

(a) the end of the appeal period for the assessment of tax unpaid by reason of the failure, or

(b) if there is no such assessment, the date on which the amount of tax unpaid by reason of the failure is ascertained.

(3) If the non-compliance consists of a failure to submit a return or other document, the relevant period is the period of 12 months beginning with—

(a) the end of the appeal period for the assessment of the liability to tax which would have been shown in the return, or

(b) if there is no such assessment, the date on which that liability is ascertained.

(4) If the non-compliance consists of making and delivering a tax document containing an inaccuracy, the relevant period is the period of 12 months beginning with—

(a) the end of the appeal period for the decision correcting the inaccuracy, or

(b) if there is no assessment to the tax concerned within paragraph (a), the date on which the inaccuracy is corrected.

(5) In this paragraph references to the appeal period are to the period during which—

(a) an appeal could be brought, or

(b) an appeal that has been brought has not been finally determined or withdrawn.

Appeals

20

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.

21

(1) An appeal under paragraph 20 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.

22

(1) On an appeal under paragraph 20(a) that is notified to the tribunal, the tribunal may affirm or cancel HMRC's decision.

(2) On an appeal under paragraph 20(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 16 or 17 (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 21(1)).

Reasonable excuse

23

(1) Liability to a penalty under paragraph 1 does not arise in relation to a particular failure to correct any relevant offshore tax non-compliance within the RTC period if the person concerned (P) satisfies HMRC or the relevant tribunal (as the case may be) that there is a reasonable excuse for the failure.

(2) For this purpose—

(a) an insufficiency of funds is not a reasonable excuse, unless attributable to events outside P's control,

(b) where P relied on any other person to do anything, that cannot be a reasonable excuse unless P took reasonable care to avoid the failure,

(c) where P had a reasonable excuse but the excuse has ceased, P is to be treated as continuing to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased, and

(d) reliance on advice is to be taken automatically not to be a reasonable excuse if it is disqualified under sub-paragraph (3).

(3) Advice is disqualified (subject to sub-paragraph (4)) if—

(a) the advice was given to P by an interested person,

(b) the advice was given to P as a result of arrangements made between an interested person and the person who gave the advice,

(d) the advice failed to take account of all P's individual circumstances (so far as relevant to the matters to which the advice relates), or

(e) the advice was addressed to, or was given to, a person other than P.

(4) Where advice would otherwise be disqualified under any of paragraphs (a) to (d) of sub-paragraph (3) the advice is not disqualified if at the end of the RTC period P—

(a) has taken reasonable steps to find out whether or not the advice falls within that paragraph, and

(b) reasonably believes that it does not.

(5) In sub-paragraph (3) “an interested person” means, in relation to any relevant offshore tax non-compliance—

(a) a person (other than P) who participated in relevant avoidance arrangements or any transaction forming part of them, or

(b) a person who for any consideration (whether or not in money) facilitated P's entering into relevant avoidance arrangements.

(6) In this paragraph “avoidance arrangements” means arrangements as respects which, in all the circumstances, it would be reasonable to conclude that their main purpose, or one of their main purposes, is the obtaining of a tax advantage.

(7) But arrangements are not avoidance arrangements for the purposes of this paragraph if (although they fall within sub-paragraph (6))—

(a) they are arrangements which accord with established practice, and

(b) HMRC had, at the time the arrangements were entered into, indicated its acceptance of that practice.

(8) Where any relevant offshore tax non-compliance arose originally because information was submitted to HMRC on the basis that particular avoidance arrangements had an effect which they did not have, those avoidance arrangements are “relevant avoidance arrangements” in relation to that tax non-compliance.

(9) In sub-paragraph (6)—

(a) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and

(b) a “tax advantage” includes—

(i) relief or increased relief from tax,

(ii) repayment or increased repayment of tax,

(iii) avoidance or reduction of a charge to tax or an assessment to tax,

(iv) avoidance of a possible assessment to tax,

(v) deferral of a payment of tax or advancement of a repayment of tax.

Double jeopardy

24

(1) Where by reason of any conduct a person—

(a) has been convicted of an offence, or

(b) is liable to a penalty otherwise than under paragraph 1 for which the person has been assessed (and the assessment has not been successfully appealed against or withdrawn),

that conduct does not give rise to liability to a penalty under paragraph 1.

(2) In sub-paragraph (1) the reference to a penalty otherwise than under paragraph 1—

(a) includes a penalty under paragraph 6 of Schedule 55 to FA 2009, but does not include penalties under any other provision of that Schedule, and

(b) includes a penalty under subsection (5) of section 93 of TMA 1970 but, does not include penalties under any other provision of that section.

(3) But the aggregate of—

(a) the amount of a penalty under paragraph 1, and

(b) the amount of a penalty under paragraph 5 of Schedule 55 which is determined by reference to a liability to tax,

must not exceed 200% of that liability to tax.

(4) In sub-paragraph (1) “conduct” includes a failure to act.

Application of provisions of TMA 1970

25

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

PART 3 — Further provisions relating to the requirement to correct

Extension of period for assessment etc of offshore tax

26

(1) This paragraph applies where—

(a) at the end of the tax year 2016-17 a person has relevant offshore tax non-compliance to correct, and

(b) the last day on which it would (disregarding this paragraph) be lawful for HMRC to assess the person to any offshore tax falls within the period beginning with 6 April 2017 and ending with 4 April 2021.

(2) The period in which it is lawful for HMRC to assess the person to the offshore tax is extended by virtue of this paragraph to end with 5 April 2021.

(3) In this paragraph “offshore tax”, in relation to any relevant offshore tax non-compliance, means tax corresponding to the offshore PLR in respect of the non-compliance.

Further penalty in connection with offshore asset moves

27

(1) Schedule 21 to FA 2015 (penalties in connection with offshore asset moves) is amended as follows.

(2) In paragraph 2 (original penalties triggering penalties under Schedule 21) omit “and” after paragraph (b) and after paragraph (c) insert

, and (d) a penalty under paragraph 1 of Schedule 18 to FA 2017 (requirement to correct relevant offshore tax non-compliance).

(3) In paragraph 3 (meaning of deliberate failure) after paragraph (c) insert—

(d) in the case of a penalty within paragraph 2(d), P 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 terms used in paragraph (d) have the same meaning as in Schedule 18 to FA 2017.

(4) In paragraph 5 (meaning of “relevant time”) after sub-paragraph (4) insert—

(5) Where the original penalty is under paragraph 1 of Schedule 18 to FA 2017, the relevant time is the time when that Schedule comes into force.

Asset-based penalty in addition to penalty under paragraph 1

28

(1) Schedule 22 to FA 2016 (asset-based penalty for offshore inaccuracies and failures) is amended as follows.

(2) In paragraph 2 (meaning of standard offshore penalty)—

(a) in sub-paragraph (1) for “or (4)” substitute “ (4) or (4A) ”,

(b) after sub-paragraph (4) insert—

(4A) A penalty falls within this 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 (c) the tax at stake is (or includes) capital gains tax, inheritance tax or asset-based income tax.

, and

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

(3) In paragraph 3 (tax year to which standard offshore penalty relates) after sub-paragraph (3) insert—

(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. (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.

(4) In paragraph 5 (meaning of offshore PLR), in sub-paragraph (1)(a) after “FA 2008” insert “ or Schedule 18 to FA 2017 ”.

(5) In paragraph 6 (restriction on imposition of multiple asset-based penalties for same asset), in sub-paragraph (1)(a) after “penalty” insert “ (other than one imposed under paragraph 1 of Schedule 18 to FA 2017) ”.

(6) After paragraph 6 insert—

(6A) Where— (a) a penalty has been imposed on a person under paragraph 1 of Schedule 18 to FA 2017, and (b) the potential loss of revenue threshold has been met, only one asset-based penalty is payable by the person in relation to any given asset.

(7) In paragraph 13 (asset-based income tax) after sub-paragraph (2) insert—

(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.”

(8) In paragraph 19(2) (interpretation: incorporation of definitions from other legislation for “or Schedule 55 to FA 2009” substitute “ Schedule 55 to FA 2009 or Part 1 of Schedule 18 to FA 2017 ”.

29

(1) TMA 1970 is amended as follows.

(2) In section 103ZA (disapplication of sections 100 to 103 in the case of certain penalties) omit the “or” after paragraph (j) and after paragraph (k) insert

, or (l) Schedule 18 to the Finance Act 2017.

(3) In section 107A (relevant trustees)—

(a) in subsection (2)(a) after “Finance Act 2009” insert or Schedule 18 to the Finance Act 2017”, and

(b) in subsection (3), after paragraph (c) insert—

(d) in relation to— (i) a penalty under Schedule 18 to the Finance Act 2017, or (ii) interest under section 101 of the Finance Act 2009 on a penalty within sub-paragraph (i), the end of the RTC period (within the meaning of Schedule 18 to the Finance Act 2017);

Publishing details of persons assessed to penalty or penalties under paragraph 1

30

(1) The Commissioners for Her Majesty's Revenue and Customs (“the Commissioners”) may publish information about a person (P) if in consequence of an investigation they consider that sub-paragraph (2) or (3) applies in relation to P.

(2) This sub-paragraph applies if—

(a) P has been found to have incurred one or more relevant penalties under paragraph 1 (and has been assessed or is the subject of a contract settlement), and

(b) the offshore potential lost revenue in relation to the penalty, or the aggregate of the offshore potential lost revenue in relation to each of the penalties, exceeds £25,000.

(3) This sub-paragraph applies if P has been found to have incurred 5 or more relevant penalties under paragraph 1.

(4) A penalty incurred by P under paragraph 1 is “relevant” if —

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

(b) the penalty relates to the failure to correct that non-compliance.

(5) The information that may be published is—

(a) P's name (including any trading name, previous name or pseudonym),

(b) P's address (or registered office),

(d) the amount of the penalty or penalties,

(e) the offshore potential lost revenue in relation to the penalty or the aggregate of the offshore potential lost revenue in relation to each of the penalties,

(f) the periods or times to which the uncorrected relevant offshore tax non-compliance relates,

(g) any other information that the Commissioners consider it appropriate to publish in order to make clear the person's identity.

(6) In sub-paragraph (5)(f) the reference to the uncorrected relevant offshore tax non-compliance is to so much of P's relevant offshore tax non-compliance at the end of the 2016-17 tax year as P failed to correct within the RTC period.

(7) The information may be published in any manner that the Commissioners consider appropriate.

(8) Before publishing any information the Commissioners must—

(a) inform P that they are considering doing so, and

(b) afford P the opportunity to make representations about whether it should be published.

(9) 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.

(10) No information may be published for the first time after the end of the period of one year beginning with that day.

(11) No information may be published (or continue to be published) after the end of the period of one year beginning with the day on which it is first published.

(12) No information may be published if the amount of the penalty—

(a) is reduced under paragraph 16 to the minimum permitted amount (being 100% of the offshore PLR), or

(b) is reduced under paragraph 17 to nil or stayed.

(13) 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.

(14) 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.

31

(1) The Treasury may by regulations amend paragraph 30(2) to vary the amount for the time being specified in paragraph (b).

(2) Regulations under this paragraph are to be made by statutory instrument.

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