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HMRC internal manual

Customs Civil Penalties Guidance

Mitigation: use of discretion to mitigate

Where there is no reasonable excuse, we must always consider mitigation. Mitigation allows flexibility when issuing and reviewing penalties.

We have discretion to mitigate a penalty where there are mitigating factors.

Mitigating factors might include,

  • a previously good compliance record
  • help given in identifying and quantifying under-declarations
  • steps taken to avoid repeating the contravention.

However, the law provides that mitigating factors do not include

  • insufficiency of funds to pay the relevant duties, taxes or penalty
  • the fact that there has been no or no significant loss of any relevant tax or duty
  • the fact that the person liable to the penalty, or a person acting on their behalf, has acted in good faith.

Furthermore, mitigation must not be used as a vehicle for reducing arrears. For example, we must not mitigate a penalty to a level which a trader would be able to pay, just because they have cash flow problems.

Be aware that

  • sympathy is not the basis for mitigation
  • we should not be unduly influenced by precedent. Like any discretion, mitigation must be considered in relation to the circumstances of each individual case.

Traders may appeal against the amount of mitigation allowed by appealing against the amount of the penalty.

See CCPG30400 for detailed operational guidance on mitigation.