Charging penalties: recording and calculating penalties on the National Penalties Processing System (NPPS): about NPPS: when to complete NPPS
All new penalties to be charged, including those included in a contract settlement, must be recorded and authorised in NPPS.
You should not create your penalty case in NPPS until your penalty decisions have been authorised on the Penalty Decisions and Actions Checklist (PDAC), see CH407050.
It is not necessary to enter on NPPS details of penalty cases that will not be charged. Examples of ‘No’ or ‘Nil’ penalty that will not be charged include
- inaccuracies deemed to be a mistake despite taking reasonable care (MDTRC), see CH402703, except in multiple error cases involving an overstatement, see *below
- (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- unprompted disclosures of careless inaccuracies that result in a nil penalty, see CH403202
- VAT under-assessment cases where the penalty is offset by a Default Surcharge
- cases where it has been established that there are means problems.
However, you must record the reason for ‘No’ and ‘Nil’ penalties on Caseflow/CRMM so that management information and statistics can be produced.
*Where an overstatement needs to be offset against an inaccuracy that incurs a penalty, you will need to ensure that any inaccuracies that have not resulted in a penalty, for example, a MDTRC, are included in the total understatement, see CH82250.