HMRC has issued guidance setting out the penalty regime for companies failing to follow country-by-country reporting rules
The maximum penalty is £3,000 for an inaccuracy in a country-by-country report, or in additional information which HMRC has asked for. This is for each report that an inaccuracy relates to.
There is an initial £300 penalty for not meeting an obligation and this may be charged for each failure made. This means there can be multiple failures in a reporting period where penalties can be charged.
In the event that a company does not submit a completed country by country report, HMRC can charge daily penalties of £60 although this is capped at £3,000.
When assessing the amount of a penalty, HMRC considers:
• the number of error types;
• whether there is a material error;
• whether more than one jurisdiction is affected;
• whether the company has previously sent HMRC an inaccurate country by country report;
• whether the company has previously sent inaccurate supplementary information in relation to a country-by-country report; and
• whether the company disclosed the error to HMRC.
HMRC will initially contact the reporting company to alert them about a possible error or missing report, advising them of a penalty risk for non-compliance.
Additionally, there is a 30-day penalty appeal period.
These penalties include penalties for inaccurate information and penalties for not meeting obligations under The Taxes (Base Erosion and Profit Shifting) (Country-by-Country reporting) Regulations 2016.