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HMRC internal manual

Compliance Operational Guidance

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HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: working the case: Human Rights Act 1998 (HRA) - background

On 2 October 2000 the Human Rights Act came into force. From that date the provisions of the European Convention on Human Rights (ECHR) were incorporated into UK law. A citizen’s rights under the ECHR can now be enforced directly in the UK courts.

The provisions of ECHR apply to companies as well as individuals.

King v UK (ECtHR 13881/2004)

The European Court of Human Rights in Strasbourg gave their final decision in November 2004.

Following King, the Department has accepted that a limited number of our penalties are ‘criminal’ for the purposes of Article 6 of the ECHR.

The only penalties involved are those which are based on a maximum of 100% of the tax/NICs difference or the tax/NICs underpaid. We do not accept that any other of our penalties are subject to Article 6.

The most common examples of penalties caught by Article 6 are

  • error penalties charged under TMA70/S98A(4) or Schedule 24 FA2007 and
  • failure penalties under TMA70/S98A(2)(b)

but any penalty with the same basis of calculation is caught by Article 6.

The classification of ‘criminal’ within Article 6 is for the purposes of ECHR only. It does not make a case criminal for all usual UK domestic purposes and the penalties remain a civil proceeding.

Further information on King v UK can be found in the Enquiry Manual (EM1361) and in the summary of the decision at TCR39/04.

A person subject to proceedings involving Article 6 ECHR has

  • the right not to self-incriminate and
  • an entitlement to a fair and public hearing within a reasonable time.

For penalty cases where Article 6 may apply you must be careful not to infringe a person’s rights. It is therefore important that as soon as there is evidence of a liability to a penalty you

  • advise employers that they do not have to co-operate with our compliance check and of the consequences of such actions and
  • issue factsheets CC/FS7a, CC/FS19 and CC/FS9
  • work cases without unreasonable delay and
  • tell employers that we will issue early penalty determinations if

    • a Tribunal hearing is necessary, or
    • they request it and it is appropriate.

See COG906070 for further guidance.

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