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HMRC internal manual

Compliance Handbook

Penalties for inaccuracies: how to process the penalty: suspension of a penalty: circumstances in which you cannot suspend a penalty: overview

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 under Schedule 24 FA 2007 can be considered for suspension, see CH81011.

CH83142 explains that, by law, you cannot 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.

Where the person does not agree that their behaviour was careless because they consider they took reasonable care, you can still consider suspending the penalty if you believe that they will meet any suspension conditions that you set, see CH83158.

HMRC has decided that you will not suspend a penalty for a careless inaccuracy where you cannot set suspension conditions that would help the person to avoid a further penalty for a careless inaccuracy, see CH83143 

It is unlikely to be appropriate to suspend a penalty where

  • the person becomes liable to that penalty during a suspension period for a previous penalty, see CH83145.
  • The compliance check identifies a deliberate inaccuracy as well as a careless inaccuracy, see CH83144.
  • The penalty arises from tax avoidance, see CH83144.

Furthermore, if the penalty is for a careless inaccuracy for which you can set suspension conditions, you must still consider carefully whether past behaviour indicates that the person is unlikely to comply with any conditions you may set, see CH83146.