What is the first step in calculating penalties for lost revenue?

The first step in calculating penalties for lost revenue involves looking for potential lost revenue. This phase is critical as it sets the foundation for understanding the extent of the revenue loss that has occurred. By identifying areas where revenue may have been lost, you can gather the necessary information needed to assess whether penalties are applicable and to what extent.

This initial assessment prepares the groundwork for subsequent steps in the penalty calculation process, such as identifying the applicable tax bands and revenues, determining maximum penalties, and calculating unprompted penalties. Establishing the potential lost revenue helps to provide context and clarity throughout the entire assessment process. Thus, beginning with an examination of potential lost revenue ensures a more accurate and comprehensive approach to calculating any penalties that may arise from that loss.