Powers and penalties

Powers

• There is mandatory training (30 hours of self-learning) for HMRC compliance staff. Internet based training is also available to the public / advisers.
• The compliance process for large businesses will increasingly involve real-time working underpinned by the new powers rather than an enquiry-based regime. This is in contrast to the regime in local compliance where we will continue to see an enquiry-based approach.
• HMRC will use their new powers when they consider there is a serious risk, such as suspected tax fraud.
• HMRC intend to closely monitor the use of the new powers in practice and will take action in cases of improper use by its officers.

Penalties

• Penalties in mainstream local compliance enquiries are likely to be significantly higher under the new regime.
• A disclosure made by a taxpayer whilst under enquiry would be regarded as voluntary so long as the disclosure did not relate to the specific risks identified by the officer.
• Disclosure can be regarded as voluntary even if HMRC has already obtained the information from another source. So, for example, a client with an offshore bank account could still make a voluntary disclosure even though HMRC may already have information about his account with a particular offshore bank.
• HMRC recognise the need to apply the test of reasonable care in a more subjective manner than previously, in accordance with the taxpayer's individual circumstances. Taxpayers must be able to evidence that they had taken reasonable care.