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HMRC internal manual

Compliance Handbook

Charging penalties: recording and calculating penalties on the National Penalties Processing System (NPPS): amending or cancelling a penalty case in NPPS: contract settlement cases - penalty assessment issued in error

Where the penalty is included in a contract settlement, you must change the default setting ‘Contract Settlement Agreed’ from ‘No’ to ‘Yes’ in the Maintain Penalty Details screen. This will inhibit the issue of the notice of penalty assessment (NPPS2).

If you do not change the default setting ‘Contract Settlement Agreed’ to ‘Yes’, NPPS will issue the penalty assessment to the person and the penalty charge will automatically be raised on SAFE, in addition to the manual charge created on SAFE for the contract settlement, see EM6403.

In these circumstances you must arrange for the penalty assessment issued in error to be manually cancelled by emailing the Safe, Team Edinburgh (ISBC) mailbox. You must not resolve the case as ‘Raised in Error’.