The new penalty provisions for incorrect tax returns effectively apply for the 2008/09 tax year onwards for personal tax. For companies, the new rules apply for accounting periods commencing on or after 1 April 2008.
The level of penalties is dependent on the behaviour of the taxpayer, whether a voluntary disclosure was made or prompted by HMRC, and the quality of the disclosure.
Table: Penalty levels
New penalties were introduced, effective since 6 April 2011, to specifically deal with offshore non-compliance. This applies to income and capital gains tax only. The level of penalty will be dependent on the country where the income or gain arises:
Table: Offshore penalties
The Isle of Man is classed as being in Category 1 which means that the penalty rate will be up to 100% of tax. See details on HMRC’s website - How territories are categorised for offshore penalties