Charging penalties: appeals: statutory reviews of Sch 24 Penalty - Implications for decisions on suspension
From 1 April 2009 customers have a legal right to have ‘appealable tax’ decisions or ‘assessments’ reviewed by another HMRC officer before appealing to the tribunal.
See CH414100 for decisions that can be appealed against.
The review will be carried out by a review officer (RO), who was not involved in making the decision and is, in most cases, outside the direct line management chain of the decision maker (DM). See ARTG4020 for role of the review officer.
If a person asks for a review, the case is referred to a RO to carry out a review of the disputed decision. The review will consider whether the decision was made correctly in line with
- policy, and
The RO will not make judgements on the consequences that flow from the outcome of the review. If the person agrees with the RO’s review conclusion and does not notify their appeal to the tribunal, then the DM may need to make a further decision based on the RO’s findings.
Consequences when the RO takes a different view on behaviour, suspension or suspension conditions from the DM
There are 3 situations where the RO may be involved in a review that could lead to a decision maker needing to look again at a decision concerning suspension.
The 3 situations are:
- The person requests a review of a decision where the behaviour is
* despite taking reasonable care * deliberate, or * deliberate and concealed.
In any of these scenarios the DM will not have considered suspension when making their original penalty decision. Following the review, the RO decides that the behaviour is careless.
- Where the person requests a review of a decision not to suspend a penalty for a careless inaccuracy.
- Where the person requests a review of the suspension conditions imposed by the DM
- Customer asks for a review of a penalty for a deliberate inaccuracy. The RO concludes that the behaviour was careless.
HMRC must consider whether suspension is appropriate and, if so, what conditions might be set. The papers should be returned to the DM to action the review conclusion. The DM:
- amends the amount of the penalty, if appropriate
- considers whether suspension is appropriate (suspension is a separate appealable decision) and if so, decide on conditions for suspension which should be imposed.
The person has the right to appeal against any conditions imposed and can request a review of the conditions imposed in relation to suspension of the penalty.
- Customer asks for a statutory review of a penalty for a careless inaccuracy deemed inappropriate for suspension arguing that the inaccuracy was despite taking reasonable care (no penalty) but that if HMRC decide that it was careless then suspension should have been offered.
RO concludes that the behaviour was careless but that the penalty was appropriate for suspension. The RO tells the customer that the penalty has been confirmed as careless, but is suitable for suspension. The papers should be returned to the decision maker to consider what conditions are appropriate for suspension.
- Customer asks for a statutory review of the suspension conditions imposed for a penalty for a careless inaccuracy. These cases will be rare because the DM and the person will normally agree on the suspension conditions and the DM will not need to impose them.
RO concludes that the suspension conditions should be changed. The papers should be returned to the decision maker to amend the suspension conditions.