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HMRC internal manual

Alcohol Wholesaler Registration Scheme

Special reduction: when special circumstances may exist

We can only make a special reduction where there are special circumstances. You must not give a special reduction without authority from TALA to do so.

Example 1 - Sandra

Special circumstances - uncommon or exceptional

Sandra makes an unprompted disclosure of trading without approval and receives full reduction for that disclosure. So she is liable to a 10% minimum penalty.

Due to the precise facts relating to Sandra’s circumstances, after very careful consideration and with authorisation at the appropriate level under remission procedures, see the Admin Law guidance, HMRC decided not to collect the penalty.

In these precise uncommon circumstances, while Sandra was still liable in law to a TWA penalty, we would consider reducing the penalty through special reduction, to nil if appropriate. The appropriate reduction of the penalty would depend on the precise uncommon and exceptional reasons why it was decided not to collect the outstanding debt.

Example 2 – Brian and Mark

Special circumstances - strict application of penalty law contrary to clear compliance intention of penalty law

Brian and Mark, a father and son, traded in partnership and were approved as an alcohol wholesaler. Brain retired from the partnership trade. Mark continued to trade afterwards as a sole trader, but did not notify us that there had been a change of entity. Mark continued to comply with all his AWRS and other tax obligations but he failed to reapply as a sole trader. He was therefore liable for a TWA penalty.

In these precise circumstances, where all duty and tax obligations continued to be met and there was no new information suggesting Mark was not fit and proper to be approved, and there is a close association (here the father and son succession relationship), we may reduce the penalty to an appropriate level through special reduction. We would only consider this because there is a close association between the two tax entities.