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'Potential lost revenue' is a key part of the harmonised penalty regime for:

1. Ìý

   •ÌýÌýÌýÌý inaccuracy in a document (see A4.530), and

2. Ìý

   •ÌýÌýÌýÌý failure to notify liability (see A4.540)

Broadly speaking, the potential lost revenue (PLR) is the amount of revenue which would have been lost to the Exchequer if the taxpayer's misconduct had not come to HMRC's attention. It is the measure to which the applicable penalty percentage is applied to arrive at the penalty chargeable before any reductions.

The late filing penalty provisions do not refer to PLR as such but the tax-geared penalties operate in a not dissimilar way. The percentage specified by the statutory provisions is applied to the tax liability that would have been shown in the return. This is defined as the amount which, if a complete and accurate return had been delivered on the filing date, would have been shown to be due or payable by the taxpayer for the period to which the return relates (see A4.552).

Late payment penalties (see A4.560) are not based