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HMRC internal manual

Compliance Handbook

Penalties for inaccuracies: how to process the penalty: suspension of a penalty: suspension conditions: 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.

You can only suspend a penalty for a careless inaccuracy if you can set at least one specific suspension condition that would help the person to avoid becoming liable to further penalties for a careless inaccuracy under paragraph 1. In a suspension condition you must specify the action that the person must take and the period within which it must be taken.

A condition must be SMART, see CH83153.

  • Specific - directly related to the business or individual being penalised
  • Measurable - the person needs to be able to show that the condition has been met
  • Achievable - the person must be able to meet the condition
  • Realistic - we cannot set a condition that would be unreasonable for the person to comply with
  • Time bound - the condition must be met by a certain date.

Overall, you must set

  • at least one specific condition, and
  • the generic condition that the person must file all their returns on time during the suspension period.

You must discuss the suspension conditions you intend to set with the person. If the person does not agree with the conditions you set they may appeal against your notice of suspension, see CH83158.

FA07/SCH24/PARA14 (3) & (4)