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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Charging penalties: authorisation: completing the Penalty Decisions and Actions Checklist (PDAC)

Completion of the Penalty Decisions and Actions Checklist (PDAC) is mandatory in all compliance checks that identify an inaccuracy, failure or wrongdoing. This includes ‘No’ and ‘Nil’ penalty cases.

It must also be used in instances where consideration of that person’s behaviour is outside of a compliance check, for example voluntary disclosures.

The PDAC is available to download from SEES in the Penalties Toolkit. It is a tool for caseworkers and managers designed to provide:

  • a step by step guide to key stages in the penalty process with links to guidance
  • a standardised audit trail of actions and evidence that will enable caseworkers to demonstrate they have sufficient evidence to support their decisions on

    • behaviours
    • quality of disclosure
    • suspending penalties
  • a record of the outcome of a review or appeal.

It also helps authorising officers easily find and review evidence of penalty decisions.

In addition, data is extracted from the PDAC to produce the following outputs:

  • a penalty explanation letter and calculation summary
  • the VAT292 form for input into the VAT Mainframe
  • a referral to the Serious Defaulters Management Unit in deliberate or deliberate and concealed behaviour cases and to the Managing Serious Defaulters Programme (MSD) where Publishing Details of Deliberate Defaulters applies.

You should create the PDAC when an inaccuracy, failure or wrongdoing has been identified and use it to help you review your actions and findings as the compliance check progresses.

Only one PDAC is needed for each check. For cases with multiple inaccuracies, failures or wrongdoing and periods, you can create additional lines using the ‘Add’ button. In multiple period cases the PDAC may include periods with no penalty. Nil penalty periods that are entered in the PDAC will not appear in the penalty explanation letter and VAT292.

The field for recording your arguments and evidence for your penalty behaviour conclusions in the behaviour tab allows 900 characters. When completing this field, remember that the text you enter will appear in the NPPS100 Penalty Explanation Letter.

If you need to give the authorising officer more information, use the ‘Other details’ tab or send them a more comprehensive submission. It is essential that you include clear references to case papers so the authorising officer can easily see the documents that helped you make your decisions.

You must include in the PDAC and/or accompanying submission, any actual or likely arguments from the person against your conclusions and your responses to those arguments.

Where penalties are charged for careless behaviour, you will need to explain what reasonable care the person should have taken, establish why they didn’t take reasonable care and have the evidence to show that the person did not take it.

When completed, send the PDAC to the authorising officer via email or by saving it in a shared drive if that is the preferred local arrangement.

You must save the finalised PDAC as part of the audit trail. Where you record cases on Caseflow, the finalised PDAC must be saved to the case document store.

The PDAC is not a case management tool and does not replace Caseflow, electronic folder (EF) or NPPS.

There is more guidance about using the PDAC at COG87000 or by contacting the COPGU Mailbox.