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HMRC internal manual

Compliance Handbook

The Human Rights Act and Penalties: who you must explain their Human Rights to

You should normally give the HRA message to the person you are discussing the potential penalty and underlying behaviour with. This is straightforward where this individual is the same person who is both responsible for what is wrong and liable to any penalty, for example a sole trader.

When your check is into a partnership, company or other organisation, it may not be immediately obvious which individuals in the organisation you must tell about their Article 6 rights.

A non-human person, such as a company or partnership, has the same protection under the ECHR as an individual. Several rulings in the European Courts have determined that human rights apply to non-human “persons” through the individuals who are authorised to act on the behalf of the organisation. When there is a breach of human rights, the courts consider that the individuals are “the victims” of the breach. In practice however, they are bringing the case to court on behalf of the organisation.

Individuals, who are not authorised to act on behalf of the organisation, have no Article 6 protection, for example shareholders.

Article 6 does protect employees such as bookkeepers and account clerks to the extent that they are authorised to represent the organisation about any issues you discuss that may result in penalties.

Partnerships and Limited Liability Partnerships

All partnerships have “nominated partners” who are responsible for submitting returns and dealing with HMRC. This will either be

  • a single nominated or representative partner, who has a specific role for direct taxes, see EM7021, or
  • a partner or partners who the partnership have agreed will generally deal with HMRC on behalf of the whole partnership for indirect taxes.

When you are checking a return or documents of a partnership or LLP, you must give the HRA message and factsheet CC/FS9 (GOV.UK) to the nominated partner or partners. It is the responsibility of the nominated partner or partners to communicate the HRA message to the other partners and any employees authorised to act on behalf of the partnership.

Normally your first discussions about penalties will be with the nominated partner or partners. If exceptionally, you first discuss penalties with another partner or authorised employee, you should give them the HRA message and factsheet, and send a copy of the factsheet to the nominated partner or partners.

If you subsequently need to discuss penalties with any other partners or authorised employees it is worth checking that the nominated partner or partners have made them aware of their rights.

Public and other Limited Companies

When you are checking a return or document submitted by a PLC, or limited company, you must always ensure that you give the officers of the company whose actions ultimately gave rise to the inaccuracies the HRA message and factsheet before you discuss penalties. This will always either be the company secretary and/or the other directors.

Some large businesses may also have a dedicated tax manager who is authorised to act on behalf of the company. You may need to speak to them and any other authorised employees such as bookkeepers and account clerks when considering penalties and the underlying behaviour.

This means in practice that you must give the HRA message and factsheet to the person(s) with whom you first discuss penalties. This should normally include at least one director but this may exceptionally be a specialist employee who you already know is authorised to act on behalf of the company in this capacity. If you first discuss penalties in a meeting involving several directors/authorised individuals, you should confirm that they all understand the message and give them copies of the factsheet.

If you first discuss penalties with a single director and other authorised persons are likely to become involved in subsequent discussions about penalties, you should ask the individual you are dealing with to communicate the HRA message to any other relevant individuals. You should always send a copy of the factsheet CC/FS9 (GOV.UK) to the person within the company you are corresponding with, normally the company secretary.

It is the responsibility of the director/company secretary to convey the message to other authorised employees, but in any subsequent discussions with them, it is worth checking to ensure they are aware of their rights.

Other non-corporate bodies

When checking a return or document submitted by a non-corporate body, you will normally be dealing with one specific individual, such as the treasurer or a limited number of authorised employees. In general, you should follow the same principles as you would if you were checking a company’s return. You should ensure that you give the HRA message and factsheet to the person you first start to discuss penalties with and send a copy of the factsheet to the person you have been corresponding with. You should ask them to convey the message to anyone else in the organisation who will be involved in any subsequent discussions about penalties. If your check involves a large organisation and you may need to speak to individuals in several locations, you should take special care to ensure they are aware of their rights.