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HMRC internal manual

COTAX Manual

Penalties: penalty work lists: penalties requiring review list (PENR) (Action Guide)

To deal with cases on the ‘Penalties Requiring Review List’ in the responsible office consider steps 1 - 31 below.

In all cases start at step 1 and then

  • Follow steps 2 - 23 for cases where penalties have previously been issued manually
  • Follow steps 24 - 31 for cases requiring special consideration

The guide is presented as follows

Initial action Step 1
   
Filing date changed Steps 2 - 6
Amended assessment / Self Assessment Steps 7 - 11
Back dated return Steps 12 - 16
Return receipt date earlier than date of penalty occurrence Step 17
An AP is superseded and a penalty has been made on the superseded AP Step 18
An appeal is withdrawn against a penalty determination Step 19
All inhibits are removed and a previous determination was manually amended Steps 20 - 21
A return is logged and captured no assessment or self assessment raised and a tax related penalty stage has been reached Step 22
A return is unlogged after an assessment or Self Assessment raised and tax related penalty determinations have been made Step 23
Administrator / Receiver details are entered and a penalty determination has been made Steps 24 - 25
The TR1 point has been reached and the company is part of a Group Payment Arrangement Steps 26 - 28
The company has gone in to liquidation Step 29
An AP status is changed from ‘live’ to ‘dormant’ or ‘exempt’, and a penalty determination has been made and the company is now outside the charge to CT Steps 30 - 31

Initial action

1. Use Function PENR (Penalties Requiring Review List) to display the work list, then
   
  * Select the entry that you want to work
  And
  * Use the [View] button to see all available details for the case
  * Use Function VPPD (View Payments and Postings Details) to check the payment position of any penalty charges already on record
  * Check which of the following is shown as ‘Y’ (Yes)
  * Filing date changed. If ‘Y’ go to step 2
  * Amended assessment. If ‘Y’ go to step 7
  * Backdated return. If ‘Y’ go to step 12
  * Sup AP with liability. If ‘Y’ go to step 18
  * Manual Amendment. If ‘Y’ go to step 20
  * Return Unlogged. If ‘Y’ go to step 23
  * Company in Administration / Receivership. If ‘Y’ go to step 24
  * Group Payment Arrangement. If ‘Y’ go to step 26
  * Company in Liquidation. If ‘Y’ go to step 29
  * Company outside the charge to CT. If ‘Y’ go to step 30
  Note: For cases where no specific reason is displayed go to steps 17, 19, or 22 to decide what action is required

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Filing date changed

2. Select the [Options] button to go to the Process Selected Work List Case screen. Use Function DAPD (Display AP Details) to check the filing date (Word 23.5kb) or deferred filing date (if a revised filing date was entered using Function RDAC, it appears as the filing date in DAPD) and
   
  * Use the [Exit] button to return to the Process Selected Work list Case screen
3. If the change affects the amount of penalty charged
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination)
  * Enter the penalty type (‘F’ Flat-rate, or ‘T’ Tax-related) and use the [OK] button
4. If Function PPEN (Prepare Penalty Determination) shows that the NPR (No Penalty Required) or INH (Inhibit Penalty) signal is set
  * Select the required line
  And
  * Use the [MPEN] button
5. In Function MPEN (Maintain Penalty Signals)
  * Make sure that all penalty inhibition signals are set to ‘N’
  * Use the [OK] button to return to Function PPEN (Prepare Penalty Determination)
  * Use the [OK] button to issue the penalty determination
  The case is automatically deleted from the list
6. If the change does not affect the amount of penalty charged
  * Use the [Return] button to go back to the work list
  * Use the [Delete] button to delete the case from the list

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Amended assessment / Self Assessment

7. Select the [Options] button to go to the Process Selected Work List Case screen. Use function DASS (Display Assessment Details) to check whether the amended assessment has changed the tax charged and
   
  * Use the [Exit] button to return to the Process Selected Work List Case screen
8. If the amendment does alter the tax-related penalty charged
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination)
  * Enter the penalty type (‘T’ Tax-related) and use the [OK] button
9. If Function PPEN shows that the NPR (No Penalty Required) or INH (Inhibit Penalty) signal is set
  * Select the required line
  And
  * Use the [MPEN] button
10. In Function MPEN (Maintain Penalty Signals)
  * Make sure that all penalty inhibition signals are set to ‘N’
  * Use the [OK] button to return to Function PPEN
  * Use the [OK] button to issue the penalty determination
  * The case is automatically deleted from the list
11. If the amendment does not alter the tax-related penalty charged
  * Use the [Return] button to go back to the work list
  * Use the [Delete] button to delete the case from the list

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Back dated return

12. Select the [Options] button to go to the Process Selected Work List Case screen
   
  * Use Function DAPD (Display AP Details) to check the date the return was received
  And
  * Use the [Exit] button to return to the Process Selected Work List Case screen
13. If the date of receipt will affect the amount of penalty charged
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination)
  * Enter the penalty type (‘F’ Flat-rate, or ‘T’ Tax-related) and use the [OK] button
14. If Function PPEN (Prepare Penalty Determination) shows that the NPR (No Penalty Required) or INH (Inhibit Penalty) signal is set
  * Select the required line
  And
  * Use the [MPEN] button
15. In Function MPEN (Maintain Penalty Signals)
  * Make sure that all penalty inhibition signals are set to ‘N’
  * Use the [OK] button to return to Function PPEN (Prepare Penalty Determination)
  * Use the [OK] button to issue the penalty determination
  The case is automatically deleted from the list
16. If the date of receipt does not affect the amount of penalty charged
  * Use the [Return] button to go back to the work list
  * Use the [Delete] button to delete the case from the list

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Return receipt date earlier than date of penalty occurrence

17. No specific ‘reason’ to indicate this type of case is displayed when you view the case as at step 1 above but you can see the date of receipt
   
  * Use the [Options] button to go to the Process Selected Work List Case screen
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination). This shows you the penalties charged and the penalties due
  * Enter the penalty type - ‘F’ Flat-rate
  * Use the [OK] button to issue the revised penalty determination
  * The case is automatically deleted from the list

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An AP is superseded and a penalty has been made on the superseded AP

18. You need to review and revise if necessary the penalties made on the superseded AP and penalties required to be made on the superseding (new) AP by reference to the specified period
   
  * Use the [Options] button to go to the Process Selected Work List Case screen
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination). This shows you the penalties charged and the penalties due
  * Enter the penalty type - ‘F’ Flat-rate, ‘T’ Tax-related
  * Use the [OK] button to issue the revised penalty determination
  * The case is automatically deleted from the list.

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An appeal is withdrawn against a penalty determination

19. No specific ‘reason’ to indicate this type of case is displayed when you view the case in accordance with step 1 above. You must consider the circumstances giving rise to the withdrawal of the appeal, and any effect they may have on the existing penalty position
   
  * Use the [Options] button to go to the Process Selected Work List Case screen
  * Use the [OK] button to select the normal next action Function PPEN (Prepare Penalty Determination). This shows you the penalties charged and the penalties due
  * If you decide that further amendment to the penalty is due
  * Use the [OK] button to issue the penalty determination
  * The case is automatically deleted from the list
  * If you decide that no further amendment to the penalty is due
  * Use the [Return] button to go back to the work list
  * Use the [Delete] button to delete the case from the list

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All inhibits are removed and a previous determination was manually amended

20. The case has been listed because
   
  * Previously existing penalty inhibition signals have been removed
  And
  * A previously existing determination has been amended
21. You should
  * Use the [Options] button to go to the Process Selected Work List Case screen
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination). This shows you penalties charged and penalties due
  * If you decide that further amendment to the penalty is due
  * Use the [OK] button to issue the penalty determination
  * The case is automatically deleted from the list
  * If you decide that no further amendment to the penalty is due
  * Use the [Return] button to go back to the work list
  * Use the [Delete] button to delete the case from the list

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A return is logged and captured no assessment or self assessment raised and a tax related penalty stage has been reached

22. No specific reason is shown for cases of this type when you view the case in accordance with step 1 above but there is an entry in the Penalty Reached field
   
  * Use the [Options] button to go to the Process Selected Work List Case screen
  ### If you want to record a self assessment
  * Select Function RAMA (Record / Amend Assessment). When you have completed this function you are automatically taken to a penalties actions options box. The three choices available are
  * To allow automatic issue of the penalty determination
  * Use Function PPEN (Prepare Penalty Determination). This shows you the penalties charged and the penalties due
  * Set the No Penalty Required signal
  After you have completed the action, the case is automatically deleted from the list
  ### If you do not want to record a self assessment at this stage
  BF the case, entering an appropriate BF note, until you are in a position to finalise matters and revise the penalties

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A return is unlogged after an assessment or Self Assessment raised and tax related penalty determinations have been made

23. Revise any tax-related penalty, leaving the flat-rate penalty determinations in place. Any Revenue Determination which was displaced by the return is re-instated and any tax-related penalty should therefore be revised in accordance with the determination
   
  * Use the [Options] button to go to the Process Selected Work List Case screen
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination). This shows you the penalties charged and the penalties due
  * Enter the penalty type - ‘T’ - Tax-related
  * Use the [OK] button to issue the revised penalty determination
  The case is automatically deleted from the list

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Administrator / Receiver details are entered and a penalty determination has been made

24. When you view the details of the case as in step 1 above, it is listed as ‘Company in Administration / Receivership - Y’. This occurs when the following condition applies
   
  * Administration (not subject to the Enterprise Act 2002) / Receivership details have been entered in Function ACAP (Add / Amend Capacitor details). Penalties are not normally charged during any period of receivership, old style administration or administrative receivership
25. You should
  * Use the [Options] button to go to the Process Selected Work List Case screen
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination). This shows you penalties charged and penalties due
  * Use the [OK] button to issue the penalty determination
  * Review the penalties using the information at COM100000 
  * Dependant on the result of your review
  * Use the [OK] button to issue the amended penalty determination. The case is automatically deleted from the list
  Or
  * Where you do not wish to issue an amended penalty determination, use the [Delete] button to delete the entry

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The TR1 point has been reached and the company is part of a Group Payment Arrangement

26. If working in CT Operations
   
  * Refer the case to the HO Technical team to review the case
  * Enter a BF date
27. When you view the details of a case as in step 1 above, it is listed as ‘Group Payment Arrangement - Y’. This occurs when the following conditions apply
  * The TR1 point has been reached (18 months after end of AP)
  And
  * The company has a group payment arrangement
28. In a Group Payment Case, the calculation of tax-related penalties may be based on a notional apportionment of payments under the GPA contract, rather than the actual payment history. That notional apportionment cannot occur before 24 months after the end of the accounting period and requires Technical Caseworker judgement
  * If you are not the co-ordinating Technical Caseworker, alert him / her to the potential TR1 penalty position
  * Put the file on BF until the 24 month point
  * Review the case again at the 24 month BF to check that the case has reached the TR2 point
  * Contact the co-ordinating Technical Caseworker for advice about what notional payments to allocate to your company in calculating the unpaid tax for tax related penalty purposes

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The company has gone in to liquidation

29. When you view the details of the case as in step 1 above, it is listed as ‘Company in Liquidation - Y’. This occurs when the following condition applies
   
  * A liquidation date has been entered in Function ACTP(Amend CT Payer Details)
  Penalties are not normally charged for late returns covering periods up to the date of liquidation in Creditors Voluntary or Compulsory Liquidation. However they are normally charged for Members Voluntary Liquidations. When you set the ‘Co Liqn - Mem Vol’ field to ‘N’ or ‘Y’ in Function ACTP, it allows COTAX to distinguish between liquidation types and either set the No Penalty Required signal for relevant APs before or after the date of liquidation, or to charge penalties for appropriate APs

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An AP status is changed from ‘live’ to ‘dormant’ or ‘exempt’, and a penalty determination has been made and the company is now outside the charge to CT

30. When you view the details of the case as in step 1 above, it is listed as ‘Company outside the charge to CT - Y’. This occurs when the following conditions apply
   
  * There is a change to the AP status from ‘live’ to ‘dormant’ or ‘exempt’ and the company is now outside the charge to CT
  * The company has been served with a Notice to Deliver, and
  * A penalty has been charged
31. You should
  * Use the [Options] button to go to the Process Selected Work List Case screen
  * Use the [OK] button to go to the normal next action Function PPEN (Prepare Penalty Determination). This shows you penalties charged and penalties due
  * Review the penalties using the information in’ Companies Outside the Charge to CT’ at COM100020 
  * Depending on the result of your review, either
  * Use the [OK] button to issue the amended penalty determination. The case is automatically deleted from the list
  Or
  * Where you do not wish to issue an amended penalty determination, use the [Delete] button to delete the entry