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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
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Appeals: handling appeals and postponements: penalty determinations - appeals

This subject is presented as follows.

Common grounds of appeal

Postal delays
Output
Suspensions

Common grounds of appeal

A company may appeal against a penalty determination on one of the following grounds, but the list is not exhaustive.

  • It delivered the return after the standard filing date (Word 42KB) but before a revised filing date calculated by reference to legislation. See COM130210 for more information.
  • It claims that the automatic issue of a late-filing penalty relates to an AP which forms part of a longer period of account, so the filing date of the AP should be revised. See COM10104 for more information.
  • It delivered the return after the standard or revised filing date but before the date allowed for delivery of its statutory accounts for the return period. See COM100000 for more information.
  • It is not required to deliver a return in response to the notice. This can happen only when the period specified in the notice to deliver is less than 12 months. For more information see COM130000 onwards.
  • It has a reasonable excuse for the late delivery of its return. See COM100000 for more information.
  • It claims that the amount of tax unpaid on which a tax-related penalty is based is incorrect. For more information see COM100000 onwards.

The postponement provisions do not apply to appeals against penalty determinations. When you enter the details of an appeal against a penalty determination, COTAX automatically stands over all of the penalty that is unpaid.

Once you have accepted the appeal and the penalty charge has been stoodover, you must identify a case owner to actively manage it. See COM10120 for further guidance on this subject.

You cannot mitigate a penalty for the late filing of a return. If the penalty is due, having regard to all the circumstances of the case, then you charge the penalty in full in accordance with the relevant legislation. See the Company Taxation Manual (CTM) at CTM94010.

Postal delays

Very few companies are exempt from mandatory e-filing of their returns. Where you have agreed that a company is excluded from the obligation, it has to deliver its return not later than the filing date. It is not sufficient just to post it before that date.

Where, exceptionally, a company appeals against a penalty on the grounds of a postal delay, you should only allow a reasonable excuse claim if you are satisfied that the return was posted:

  • by second class post, at least four working days before the statutory filing date
  • by first class post at least two working days before the statutory filing date.

Output

When you record an appeal in function HAPP (Handle Appeal), COTAX issues a form 64-4(Ack) to acknowledge it.

On the final screen of HAPP, COTAX gives you the option of sending the form to the company, the agent or inhibiting the output.

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Suspensions

Where the CT Unit Cumbernauld or the Debt Management office record a suspension in potential appeal cases, they send you the appropriate correspondence with form AOC385 from the CT Unit Cumbernauld or C52D from the Debt Management office.

See:

  • COM10101 for a list of forms relevant to this subject
  • COM10102 for a list of functions to use in particular situations
  • COM10103 for legislation applying to this subject.