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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Penalties for inaccuracies: how to process the penalty: suspension of a penalty: circumstances in which you might suspend a penalty: which penalties you should consider for suspension

You must check the date from which these rules apply for the tax or duty you are dealing with. See CH81011 for full details.

Only penalties for careless inaccuracies can be considered for suspension, see CH81140. You must consider suspension for every penalty for a careless inaccuracy but it will not be appropriate for every penalty for a careless inaccuracy to be suspended see CH83140+.

You cannot under any circumstances suspend a penalty for

  • a deliberate inaccuracy
  • an error in a person’s document attributable to another person
  • a failure to take reasonable steps to notify an under-assessment.

Example

At the end of an ITSA compliance check, the overall penalty position is:

Year Behaviour Amount
     
2007-08 Neglect £10,000
2008-09 Deliberate £20,000
2009-10 Careless £ 5,000
2010-11 Deliberate £25,000
2011-12 An inaccuracy attributable to another person £15,000

The 2007-08 year does not fall within the scope of Schedule 24 FA 2007. Therefore suspension is not available.

For 2008-09 you cannot consider suspending the penalty because it is for a deliberate inaccuracy.

For 2009-10 you can consider suspending the penalty because it is for a careless inaccuracy.

For 2010-11 you cannot consider suspending the penalty because it is for a deliberate inaccuracy.

For 2011-12 you cannot consider suspension because the inaccuracy was attributable to another person.

This example is to illustrate when you must consider penalty suspension. CH83134 explains what indicators to consider in deciding whether you should suspend a penalty. The presence of deliberate inaccuracies in other years in this example does not mean that you can’t consider suspension in 2009-10 but it may be an indication that it is not appropriate.

FA07/SCH24/PARA14 (1)