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HMRC internal manual

Compliance Handbook

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: person takes action to improve their compliance before you consider 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.

A person may want to address the weaknesses that gave rise to the careless inaccuracy for which a penalty is chargeable. They may want to do this before you can consider whether or not you can suspend the penalty. This may mean that the person has already met or is making progress towards meeting any conditions that you might want to set.

Suspending penalties is intended to support and encourage future compliance. We do not want to penalise those who have already taken remedial action by refusing to consider suspension.

So in these circumstances you should set specific conditions that require that the improvements should be made and maintained, even if the person has already partially or fully put those improvements in place. You should set a suspension period, see CH83170, that is sufficient for HMRC to be satisfied that the improvements have been made and are being maintained. You must also set the generic suspension condition that the person must file all their returns on time during the suspension period.


On 1 September 2012 we discover that Patrick’s returns for the years ended 5 April 2010 and 5 April 2011 contain careless inaccuracies.

On 12 September Patrick puts systems in place to ensure that his future returns will be complete and accurate.

On 15 November 2012 we assess penalties for 2009-10 and 2010-11. Even though Patrick took remedial action before we assessed the penalties, we can suspend the penalties by setting a specific suspension condition to recognise the changes that Patrick has already made and is maintaining.