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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): amending or cancelling a penalty case in NPPS: introduction

A penalty may have to be amended or cancelled as a result of

  • changes to the liability to tax, or to make payments
  • the underlying tax assessment being cancelled or amended
  • your penalty decisions being revised after discussions with the person
  • the outcome of a review
  • a tribunal decision
  • an error in the case details in NPPS or the penalty assessment.

Where you have identified an error or you need to amend the penalty, you can do this via the Maintain Penalty Details screen in NPPS up to the point the penalty is authorised, see COG90600. You should not close a case ‘Resolved - Raised in Error’ in order to amend an error in NPPS, see CH407760.

You can only amend an error after the penalty has been authorised by reopening the case using the ‘Appeal’ function, see CH407820.

With the exception of an amendment arising from a tribunal decision, you must obtain the agreement of an authorising officer to amend or withdraw/cancel a penalty assessment, see CH407000.

To amend or cancel a penalty after it has been charged, you will need to reopen the case in NPPS using the ‘reopen’ icon, see COG91520. Enter the Reason for Reopen in the text box and select one of the following options from the dropdown menu:

  • Appeal, see CH407820 
  • Late Filing Amendments, see CH407860 
  • Raised in Error, see CH407870.

Note: The word ‘Appeal’ can be taken to mean

  • receipt of an appeal against a penalty assessment
  • a discussion with the person
  • an HMRC review.