Beta This part of GOV.UK is being rebuilt – find out what this means

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: appeals: reduce or increase a penalty

You may need to reopen a case following an appeal to reduce or increase the amount of the penalty.

Reopen the case in NPPS using the ‘Appeal’ function, see COG91520.

Enter details of the appeal, see COG91540 including the amount of the appeal to be stood over, see CH407850.

To stand over a VAT penalty, you will need to set the ‘appeal indicator’ on the VAT mainframe.

Once you have resolved the appeal with the person, select Apply variation to Penalty from the Take Action dropdown menu, see COG91640. Submit.

This will take you back to the Maintain Penalty Details screen where you will amend details of the penalty, get the case approved and then authorised, see CH407740.

NPPS will generate an amended Notice of Penalty Assessment (NPPS2). In addition, you must issue a manual ‘Withdrawal, Cancellation or Amendment of Penalty Assessment (NPPS4)’ and select the appropriate option to explain the reason for the amendment. The manual NPPS4 is available in SEES>Penalties Toolkit>NPPS Letters.

Where the penalty is reduced to nil, see CH407840.

Where a charge has been created on SAFE, details of the amendment will be sent from NPPS to SAFE.

If you reduce a VAT penalty you will need to update the VAT mainframe, see CH407960.

You can then resolve the case, see COG91040.

Increase in penalty amount for additional Potential Lost Revenue (PLR)

Where there is an increase in the penalty amount because additional PLR has been identified then you must issue a supplementary penalty assessment for the additional amount.  The supplementary penalty assessment will be a separate NPPS assessment to the original penalty.