Paragraph 26 I1F1
A person who engages in sanctionable conduct is liable to a penalty.
The penalty to which the person is liable is—
in a case in which potential lost revenue is attributable to the sanctionable conduct (see paragraph 26C)—
the appropriate percentage of the potential lost revenue determined in accordance with paragraph 26C, or
if higher, £7,500;
in any other case, £7,500.
But if the person would, but for this sub-paragraph, be liable to a penalty of an amount that is higher than £1,000,000, the person is instead liable to a penalty of that amount.
For the purposes of this paragraph, the “appropriate percentage” is—
70%, or
if the person disclosed the sanctionable conduct, the percentage determined in accordance with sub-paragraphs (5) and (6).
If the person disclosed the sanctionable conduct, HMRC must reduce the appropriate percentage from 70% to a percentage that reflects the quality of the disclosure.
But the appropriate percentage may not be reduced to a percentage that is below—
in the case of a prompted disclosure, 35%, and
in the case of an unprompted disclosure, 20%.
This paragraph is subject to paragraphs 26B (increased penalties) and 27 (special reduction).
Annotations
Textual amendments
- F1
Sch. 38 paras. 26-26C and cross-headings substituted for Sch. 38 para. 26 and cross-heading (1.4.2026) by Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 18
Commencement
- I1
Sch. 38 para. 26 in force at 1.4.2013 by S.I. 2013/279, art. 2
Notes on Schedule 38
Textual amendments
- F1
Sch. 38 heading substituted (1.4.2026) by Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 2
Modifications
- C1
Sch. 38 applied by S.I. 2009/470, reg. 33(1) (as substituted (6.4.2013) by The Education (Student Loans) (Repayment) (Amendment) Regulations 2013 (S.I. 2013/607), regs. 1(1), 9)
- C2
Sch. 38 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 24(2)
- C3
Sch. 38 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 43(1)
- C4
Sch. 38 applied (with application in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment and Application of Schedule 38 to the Finance Act 2012) Regulations 2013 (S.I. 2013/622), regs. 1, 41 (as amended (1.4.2026) by Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 35)
Notes on Part 4
Textual amendments
- F1
Word in Sch. 38 Pt. 4 heading substituted (1.4.2026) by Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 17