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HMRC internal manual

Compliance Handbook

Charging penalties: suspending penalties: notifying the suspension conditions

If you think a careless penalty is payable, you should try to discuss and agree with the taxpayer the improvements to their processes and/or records that can form the conditions that enable the penalty to be suspended, see CH405165.

You also need to give the taxpayer written notification of the suspension conditions. You do this by entering the conditions into the suspension information section in the PDAC and generating the NPPS100(S).

If you have not already agreed the conditions, or you want a written record of the agreement, you should generate an NPPS101 Agreement to the Suspension Conditions document when you use the [Extract Data] function to create the NPPS100 Penalty Explanation Letter.