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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
, see all updates

Charging penalties: recording and calculating penalties on the National Penalties Processing System (NPPS): about NPPS: what NPPS does

NPPS is the department’s electronic system for recording, calculating and charging new penalties as well as managing suspended penalties. You can access the NPPS system from Caseflow, CRMM or directly using the NPPS icon, see CH407630.

Exceptionally, there may be occasions when you cannot enter a penalty case on NPPS and you will need to use a manual process to charge a penalty, see CH407900.


  • calculates penalties
  • records suspension periods and conditions
  • records management approvals and authorisations
  • produces letters and notices, including the penalty assessment
  • assists in managing suspended penalties
  • provides management information about the penalties we have charged for use by a range of internal and external stakeholders.

The NPPS automatically creates a charge in SAFE when a notice of penalty assessment (NPPS2) is issued see CH412050, except for VAT Mainframe cases.

Where a penalty relates to a business registered for VAT in the UK, and where the accounting period details are held within the VAT Mainframe, the accounting processes set out in CH412100 must be followed.

Where a penalty is included in a contract settlement the penalty assessment is inhibited when the contract settlement is recorded in the Maintain Penalty Details screen in NPPS, see COG90640.

A SAFE charge should be manually created for the contract settlement, see CH411350.

Note: Penalties for periods prior to the introduction of Schedule 24 FA07, Schedule 41 FA08 and Schedule 55 FA09 are not recorded in NPPS. These should be dealt with using existing procedures available prior to the introduction of NPPS.