AWRS100400 - Penalties and sanctions: trading without approval (TWA) overview

The AWRS is designed to reduce illicit trading in the wholesale sector by introducing a requirement for anyone trading wholesale to be approved. There are businesses who will try and avoid approval either knowingly or because they are careless about their responsibilities. From 1 January 2016, anyone who has been refused approval but continues to trade will be liable for a TWA penalty/criminal offence where appropriate. From 1 April 2016, any existing business who has failed to apply in the registration window or any new business that starts trading in the registration 鈥渨indow鈥� and fails to apply for approval may be considered to be trading without approval. Any business that intends to start trading after 1 April 2016 must apply to HMRC for approval at least 45 days before the date they intend to commence trading.

After 1 April 2016, a new business cannot start trading without an approval. There are no provisions for a belated notification in AWRS. If a person (P) commences trading without an approval, they are liable to a penalty.

We will not charge a penalty if we are satisfied that P

  • has a reasonable excuse for a non-deliberate failure, and
  • if the excuse has ended, P has remedied the failure without unreasonable delay.

The amount of the penalty is based on a maximum penalty currently set at 拢10,000 but the actual amount will be determined by the behaviour that caused the contravention - higher penalties are payable if the contravention was deliberate.

Reductions in the percentage penalty are given for disclosure and depend upon

  • whether the disclosure is unprompted or prompted, and
  • the quality of the disclosure.

We must assess the penalty assessment. The person is entitled to a review of, and can appeal against, our decision

  • that a penalty is payable, and/or
  • the amount of the penalty.

Where necessary the appeal will be heard by the tribunal.

We may agree to a special reduction of the penalty if there are special circumstances. You can find more details in AWRS110500.

Suspension of penalties is not applicable to AWRS behavioural penalties.