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HMRC internal manual

Compliance Handbook

How to do a compliance check: penalties for failure to comply with notices: Schedule 36 alternatives to daily penalties

Before issuing any further daily penalties you should consider if taking the following actions might be more effective in encouraging compliance where the notice relates to a compliance check.

  • if your compliance check is an enquiry into an IT/CTSA return, consider closing your enquiry by amending the return to a figure of tax that you could justify before the tribunal
  • for other compliance checks, consider making assessments based upon what you judge to be correct and that you could justify before the tribunal.

The appeal process puts the onus on the appellant to produce evidence to show that your assessment is wrong. The tribunal may conclude that the information required by your notice ought to be provided before hearing the appeal.

Once you have closed an SA enquiry you cannot issue further information notices for the period covered by your enquiry unless you suspect that tax may not have been assessed, an assessment has become insufficient or a relief has become excessive and you can make a discovery assessment.

On any appeal against your amendment or assessment the tribunal may require the appellant to provide the information you were seeking in order to settle the appeal, see ARTG8620.