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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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The Human Rights Act and Penalties: what you must do when a penalty may be due

You must tell the person about their rights under Article 6 of the ECHR by issuing the HRA message and factsheet, see CH300900, once you identify that there is something wrong that gives you an evidence based reason to believe that a penalty of the type listed in CH300200 may be due. You must tell the person about their rights before you ask them any questions about how or why it is wrong or discuss penalties.

CH300550 explains who we must make aware of their rights.

CH300600 explains how to issue the HRA message.

CH300700 explains when to tell the person about their rights.

Further action

Once you have issued the HRA message, you must then take the following steps.

  1. Explain how penalties can be reduced, if you have not already done this.
  2. Ask the person to confirm that they understand their rights and record what they say. If they do not understand their rights you may need to explain them in a different way.
  3. If they choose to co-operate, follow CH301000 to establish whether the person is liable to a penalty and CH300300 for guidance about the behaviours you will need to consider.
  4. If they choose not to co-operate, explain that you can use information powers to obtain any existing information or documents you need and that you will issue best estimate penalty assessments based on the facts when you have established these, see CH23050. You should also explain that you can use this information or these documents to help you establish the person’s behaviour but you cannot use these powers to demand answers to your questions. You must issue factsheet CC/FS2 (GOV.UK) - Information Notices, if you give or send them an information notice.
  5. Whether they choose to co-operate or not, you must work the case without unreasonable delay. This includes taking positive action to overcome delay by the person or their agent. CH301200 explains how delays may affect your ability to charge a penalty.

If you suspect evasion you must take care not to suggest that we have made a decision either about whether they may be liable to a penalty, or whether we will charge a penalty, see CH301100.

For some types of check, the person can apply to a tribunal at any stage for early closure of the check. This may be before you have fully established the penalty position or issued the HRA message.

If the tribunal agrees with the application to close the check and you have not ruled out evasion, see CH301100, you should contact the Evasion Referral Team for urgent advice.

Otherwise, if you are considering penalties, you must issue factsheet CC/FS9 (GOV.UK) - The Human Rights Act and Penalties straightaway if you have not already done so. You should tell the person that you will issue early penalty assessments based on the facts you have established.

If you are not able to issue any penalty assessments at the same time as the tax assessment and the person appeals against the related tax assessment, follow the guidance at CH281000.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)