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HMRC internal manual

Civil evasion penalties for Customs, Excise and VAT

Civil evasion penalties for Customs, Excise and VAT: appeals and reviews

Grounds for appeal

Appeals may be made against:

  • liability to a penalty
  • the amount of a penalty
  • the attribution of a penalty to an officer a corporate body
  • the amount apportioned to a named officer 

An individual to whom liability for payment of the S60 penalty was transferred to them under S61, may raise an issue as to whether or not the penalty was properly imposed on the corporate body in the first place under Section 60. Where the taxable person that the S60 penalty has been levied against has become insolvent, and the liquidator does not wish to bring an appeal against the S60 penalty, tribunal decisions have varied as to whether the person subject to the S61 notice can still bring an appeal against the underlying S60 penalty.

Our current view in respect of reviews is that Section 61 notices served are ‘parasitic’ on the Section 60 penalty assessments (Section 61 operates to enable the Commissioners to apportion all or part of a Section 60 penalty to, for example, a particular director, therefore effectively making that director liable for the Section 60 penalty). Consequently, the person subject to the S61 notice is directly affected by the S60 penalty assessment and accordingly should have sufficient interest to challenge whether the underlying S60 penalty assessment was properly imposed.

Where both the company and the director/managing officer appeal to a tribunal, a joint appeal may be heard.

The process

The person/relevant officer should be offered a review when they are notified of the penalty. If the person decides they want a review they should write to the address given in the notice within 30 days of the date of the Penalty Notice, see ARTG3090 

If the review officer upholds the penalty decision, they will explain in their review conclusion letter that the customer/relevant officer can appeal to the tribunal within 30 days (ARTG4820).

Further information about resolving issues and disputes is at CH280000.