Mark McLaughlin explains how you can mitigate penalties by making good quality disclosure.
The penalty regime in FA 2007 et seq offers taxpayers and their advisers the opportunity to obtain penalty mitigation in a very different way from the old regime. Whereas previously mitigation was arrived at by taking into account the three long-established and fairly well-known factors – disclosure, co-operation and size and gravity – the new system places the emphasis for the mitigation and negotiation process solely on the concept of ‘disclosure’. Whilst it is true that the old factors do form part of this disclosure process to some extent, the emphasis is now very different indeed. Disclosure represents the sole factor that will determine the level of penalty to be imposed and will be the major factor considered by HMRC in such negotiations.
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