Effectiveness of Penalty Suspension
Research with individuals and small businesses to explore customer experiences of receiving a penalty or a penalty suspension.
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In 2025, the UK government consulted on reform of behavioural penalties, including alternative approaches to penalty suspension. Currently, taxpayers who receive a penalty for a careless inaccuracy may have the penalty suspended if they meet certain conditions, such as introducing measures to avoid similar mistakes.
HMRC commissioned independent research agency, Verian to carry out research to explore the experiences of taxpayers who have received a penalty for a careless inaccuracy, both with and without a suspension. The research aimed to provide insight on whether penalty suspension is effective and to test reactions to alternative options.
Between July 2025 and August 2025, Verian conducted 43 in-depth qualitative interviews with 21 individuals (ITSA customers who pay income tax via self assessment) and 22 small businesses (VAT customers, with a turnover below £10 million, and fewer than 20 employees) to explore customer experiences of receiving a penalty or a penalty suspension.