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HMRC internal manual

Compliance Handbook

Penalties for Failure to Notify: Appeals against a penalty: Appeals against the amount of a penalty

A person has appeal and review rights against the amount of the penalty we impose. 

If a person does not want a review, they may appeal to the tribunal. If they ask for a review but are not satisfied with the conclusion they have a further 30 days within which to appeal to the tribunal. The Appeals, Reviews and Tribunals Guidance contains detailed guidance about the review and appeal process - ARTG2100 for direct taxes and ARTG3000 for indirect taxes.

If the person disputes the amount of the liability to tax or duty on which the penalty is based, an appeal against that liability may be heard by the tribunal at the same time.

The tribunal may affirm our decision or replace it with another decision that we had the power to make.

If the tribunal decides to replace our decision, it may consider whether a special reduction can be given, see CH73400. The tribunal can consider

  • our decision not to award a special reduction, or
  • our decision on the amount of a special reduction.

If the tribunal decides that a special reduction is appropriate, it may

  • apply the same percentage of reduction we applied but to a different starting point, or
  • apply a different level of special reduction.

The tribunal is only able to apply a different level of special reduction where it has reason to believe that we reached a ‘flawed decision’ see CH74600, when we applied the special reduction provisions.