My apologies - I forgot to include a reply to your question about penalties. The Revenue produces a booklet (IR160) that gives details of the things they take into account when considering penalties - ask them for a copy or view it on their website. http://www.hmrc.gov.uk/pdfs/ir160.pdf
Briefly, they look at three things - disclosure, co-operation and seriousness. The penalty starts at 100% of the additional tax and there are abatements for these three categories - up to 20% for disclosure (up to 30% if you 'come clean' before they find out about something), up to 40% for co-operation and up to 40% for seriousness.
In most cases the abatement will be 20% for disclosure. If the person under enquiry co-operates with the enquiry - that means early replies to letters, supplying everything that the enquiry officer asks for and, if nesessary making a payment on account as soon as it becomes clear that further tax might be due - they will normally get the full 40% abatement, or pretty close to it.
It is generally seriousness that gives rise to the penalty. It would be exceptional for anyone to get the full 40% abatement. You might expect an abatement of 25% to 30% here.
So, if you have 20% for disclosure, 40% for co-operation and 25% for seriousness, your total abatemetn is 85%. That would leave a penalty of 15% of the further tax. (In cases of evasion or fraud the penalties would be much higher, but most cases are regarded as the far less serious offence of neglect.)