This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Compliance Handbook

Special reduction: What is a special reduction

HMRC has the discretion to make a special reduction for certain penalties, see CH170200 where there are special circumstances, see CH170600.

A special reduction of a penalty includes

  • staying a penalty, and
  • agreeing a compromise in relation to proceedings for a penalty.

Staying a penalty means stopping or postponing enforcement of a penalty. Agreeing a compromise allows us to forego all or part of a penalty.

You do not enter into discussions regarding the amount of any special reduction. If it is right to reduce a penalty because of special circumstances, Tax Administration, Litigation and Advice (TALA) will calculate the level of the reduction, see CH175000.