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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Charging Penalties: establishing penalty behaviour: planning what questions to ask: failure to notify

Often, when you have found a failure to notify, discussed it with the person, and quantified the potential lost revenue, you will already have sufficient, if not all, of the evidence you need to decide whether the failure was non-deliberate, or potentially more serious.

Once you have established that there was a failure to notify, the non-deliberate penalty applies unless the behaviour is deliberate or the person has a reasonable excuse for their failure to notify, see CH72200.

Where you consider the failure to notify is non-deliberate, the person should be given the opportunity to provide an explanation which could satisfy you that they have a reasonable excuse.

In all cases involving potentially deliberate or deliberate with concealment behaviour, you will need to ask the person for further information, both to understand more fully how the failure to notify happened, and to obtain evidence for a decision on penalty behaviour.

When you intend to put the questions to the person in a face to face meeting, you should prepare the questions in advance so that you are clear on the facts that you need to establish and to make sure you do not forget to ask anything important during the meeting.

It is good practice to start by establishing important basic facts which will prevent later disagreements about how and why the failure to notify happened.

You can put your views to the person at the end f the check after getting approval if necessary, see CH407000 and CH408000.

Example

Diane is employed as a consultant engineer but also does freelance work. Diane does not receive SA returns so she must notify us that she also has income from self-employment. She fails to notify us.

You can find other examples of questions to establish behaviour at CH402302.

Before you ask the person about their behaviour, you must issue the HRA and penalty factsheets and explain the process to them, see CH402350.