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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Penalties for Failure to Pay on Time: Appeals against a penalty: Flawed decision

On an appeal against the amount of a penalty, the tribunal can apply a different special reduction, if it believes that we made a flawed decision when we applied the special reduction provision.

A ‘flawed’ decision made by HMRC means that it is flawed when considered in the light of the principles applicable to proceedings for judicial review.

Judicial review allows individuals, businesses and other groups to challenge the lawfulness of decisions made by

  • ministers
  • government departments
  • local authorities, and
  • other public bodies.

It is not concerned with the merits of a decision or whether the public body has made the right decision. The questions that would be before the court are.

  • Has the public body acted lawfully?
  • Was the decision irrational or unreasonable?
  • Was there any procedural impropriety?

When answering these questions the court would consider the following points.

  • Was the decision maker acting outside his legal powers?
  • Was there any unlawful delegation of the power or restraining of discretion?
  • Were irrelevant considerations taken into account?
  • Were relevant considerations not taken into account?
  • Did the decision maker act reasonably?
  • Was there any failure to listen to representations made by the person affected by the decision?
  • Was the person given any legitimate expectations about what would happen?

These are the questions that the appeal tribunal addresses when it considers whether or not an HMRC decision is flawed.

FA09/SCH56/PARA15