Tax Collection and Management (Wales) Act 2016 section 139

Reduction in penalty under Chapter 3 for disclosure

Section 139 explains how the Welsh Revenue Authority (WRA) may reduce a penalty where a person voluntarily discloses tax errors, false information, or under-assessments relating to Welsh devolved taxes or tax credits.

• WRA has discretion to reduce penalties when a person makes a qualifying disclosure about inaccuracies, false information, withheld information, or under-assessments relating to devolved taxes or tax credits.
• A qualifying disclosure requires three steps: telling WRA about the problem, giving WRA reasonable help to quantify the error, and allowing WRA access to records so the matter can be fully corrected.
• WRA may take into account whether the disclosure was unprompted (made before the person had reason to believe WRA had discovered or was about to discover the issue) or prompted (made after the person had such reason to believe).
• WRA may also consider the quality of the disclosure, which includes its timing, nature and extent — meaning earlier, fuller and more cooperative disclosures are likely to attract greater penalty reductions.