CITEX officers operational process: penalty notice: considering mitigation: determining how much litigation to allow
THIS GUIDANCE IS FOR CITEX OFFICERS ONLY
The aim is to issue a penalty which is appropriate to the circumstances of the case. To arrive at this you must determine how much mitigation to allow. You must do this through a two-step process.
- In Step 1 you must consider the individual mitigating factors.
- In Step 2 you must review the case as a whole.
You should use the mitigation table at CCPG30430 to consider the level of mitigation appropriate for the mitigating factors that appear in the case.
Each factor has a suggested range or amount of mitigation expressed as a percentage. The range of mitigation suggested is wide enough to allow significant use of discretion and if more than one factor applies they can be combined.
You should only take into account factors relevant to the case.
In some cases it may be necessary to reduce the amount of mitigation to take account of negative factors. If, for example, a trader has been obstructive or un-cooperative in some way, the mitigation you allow for other factors might be reduced.
After Step 1, you should stand back and look at the mitigation earned and the resulting penalty and decide whether it is appropriate. Is it too low? Is it too high? Is it fair? See CCPG30440 for more detailed guidance.
You should consider all the facts of the case, such as the size and maturity of the business and whether or not a professional advisor is used.
Although the law allows the Commissioners (or, on appeal, the tribunal) to reduce a penalty to nil, cases where 100% mitigation is appropriate are rare. Where, using the mitigation table, the total amount of mitigation earned amounts to or exceeds 100%, you should consider whether or not it is an appropriate result.
Mitigation is not an exact science and there is no one right answer. You should issue a penalty that you think is suitable, fair and proportionate and you should be able to justify it (on appeal if necessary). So you must clearly record why you have allowed a particular amount of mitigation, see CCPG30460. This will be agreed on the Customs Penalty Action Checklist (CPAC).