Tax Collection and Management (Wales) Act 2016 section 121

Reduction in penalty for failure to make tax return: disclosure

Section 121 explains how penalties for failing to make a tax return on time can be reduced by the Welsh Revenue Authority (WRA) where the taxpayer discloses information that had been withheld.

• WRA has discretion to reduce penalties for late filing of tax returns where the taxpayer discloses information that was withheld as a result of the failure to file.
• A valid disclosure requires the taxpayer to tell WRA about the withheld information, provide reasonable help in calculating any unpaid devolved tax, and allow WRA access to relevant records.
• WRA may consider whether the disclosure was "unprompted" (made before the taxpayer had reason to believe WRA had discovered or was about to discover the information) or "prompted" (made after such a point), with unprompted disclosures likely attracting a greater penalty reduction.
• The quality of the disclosure — including its timing, nature, and extent — is also taken into account when determining the level of any penalty reduction.

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