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HMRC internal manual

Compliance Handbook

Charging penalties: interaction between penalties: introduction

With certain exceptions, new penalty legislation contains provisions to prevent more than one penalty being charged in respect of the same tax liability. A summary of the legal provisions on penalty interaction and when they apply is at CH404200.

Similarly, although not strictly a penalty interaction, we cannot charge a surcharge when a penalty is also payable.

In all cases where there is liability to more than one penalty on the same tax, the penalty charged should reflect the most serious behaviour.

You must not settle a case by opting to charge the lower penalty. If the person does not agree with your findings you should follow the dispute resolution principles and processes.

In some circumstances, where more than one penalty or both a penalty and a late payment surcharge is payable, you will need to take action to off-set or cancel the other penalty or late payment surcharge.

The action needed depends on the penalties and surcharges involved.

This guidance explains how to deal with a range of situations that involve the interaction of penalties, see CH404300, and also cases where both a penalty and a late payment surcharge is payable.

If you need advice in a case that is not covered by this guidance, you can send details to the COPGU Mailbox.