Legislation – Finance Act 2026
Part 6Avoidance
Chapter 3Anti-avoidance information notices
Civil sanctions
198Penalty based on monies received
(1)
Subsection (3) applies if—
(a)
a penalty has been imposed on a person under section 194(1) for failure to comply with a notice,
(b)
the person, without reasonable excuse, continues to fail to comply with the notice,
(c)
an officer of Revenue and Customs has reason to believe that—
(i)
the person received money or money’s worth in connection with the contravening arrangements to which the notice relates, and
(ii)
the continuing failure is significant, and
(d)
the Upper Tribunal decides that it is appropriate for a penalty to be imposed under this section.
(2)
For the purposes of subsection (1)(c)(ii), a continuing failure is significant if—
(a)
it continues beyond the end of the period of six months beginning with the day on which the penalty referred to in subsection (1)(a) was imposed, or
(b)
as a result of the continuing failure, it is or is likely to be significantly more difficult for HMRC to—
(i)
monitor the compliance of a connected person with an anti-avoidance enactment, or
(ii)
take, or consider whether HMRC could take, action against a connected person under an anti-avoidance enactment.
(3)
The person is liable to a penalty equal to the amount of money or money’s worth received, or likely to have been received, by the person in connection with the contravening arrangements to which the notice relates.
(4)
The amount of a penalty to which a person is liable under subsection (3) must be determined by the Upper Tribunal (with such determination being treated as assessment).
(5)
An application to the Tribunal for the purposes of subsection (1)(d) or (4) may be made by an officer of Revenue and Customs and must be made before the end of the period of 12 months beginning with—
(a)
in the case of a penalty relating to a notice against which the recipient may appeal under section 204, the latest of—
(i)
the day on which the person became liable to a penalty under section 194(1),
(ii)
the last day of the period in which notice of appeal against the notice could have been given, and
(iii)
if notice of such an appeal has been given, the day on which the appeal is determined or withdrawn, or
(b)
in any other case, the day on which the person became liable to a penalty under section 194(1).
(6)
An officer of Revenue and Customs who makes an application for the purposes of subsection (1)(d) or (4) must notify the person concerned.
(7)
For the purposes of this section, a reference to contravening arrangements to which a notice relates is a reference to arrangements by reference to which the person to whom the notice relates is considered to be a connected person under section 177(1) (including, where the person is a connected person under section 177(1)(b), arrangements by reference to which the other person is considered to be a connected person).
(8)
This section does not apply in relation to a notice under section 183 (financial institutions).