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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Debt and return pursuit: PAYE: penalties for late payment: penalty appeals: decision maker actions

Actions on receipt of the appeal

On receipt of the appeal:

  • stand over the penalty charge on ETMP
  • record the appeal on the appeal spreadsheet
  • create a Pseudo Work Item on IDMS (see DMBM523675)
  • review the reasons for appeal (see “Reviewing the decision”).

Where a case requires further investigation, for example, a referral for technical or policy advice and you believe the response may take longer than ten working days, you should:

  • issue letter FPI25 (appeal accepted - decision holding letter)
  • use the freetext facility to explain you are investigating the case and/or to request additional information if required (for example, a month-by-month breakdown of liabilities and payments)
  • set an appropriate BF for the case.

Important: Appeal cases must remain stood-over until the appeal process has concluded in full.

Consider HMRC’s latest view of the matter

Your role, as decision maker, is to use all the information available to consider whether the original decision to charge a penalty was correct or whether HMRC’s view of the matter has changed. To do this, you should follow the guidance in ‘Appendix A Case Review - Points to consider’ at DMBM523695 and conduct a full and thorough case review.

Confirming HMRC’s most recent view of the matter

Whatever your decision, you must send a letter of explanation to the employer confirming HMRC’s most recent view of the matter. Follow the guidance in the table below.(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Penalty is still due

If after considering all the facts you do not agree with the employer’s reasons for appealing:

  • issue letter FPI65 (Appeal rejected - no reasonable excuse)
  • use the freetext facility to explain in full the reason you believe the penalty is still due
  • record it on the spreadsheet
  • save a paper copy of the FPI65 with the appeal papers as this will be needed if the case later goes to internal review or tribunal
  • BF 45 days (30 day appeal period plus 15 days for tribunal to notify HMRC should a tribunal application be received).

If no response is received after 45 days:

  • record this on the spreadsheet
  • cancel the stand-over on ETMP
  • close the IDMS work item
  • file the appeal papers.

Penalty is not due {.filledcircle}

If, after considering the facts, you agree the penalty is not due, you should cancel it by:

  • recording the decision on the spreadsheet
  • amending the charge on ETMP to nil
  • closing the IDMS work item
  • issuing letter FPI40 (appeal upheld - penalty not due)
  • filing the appeal papers.

Penalty partially due - amount agreed with employer {.filledcircle}

If you and the employer both agree the amount that the penalty should be reduced to, you should:

  • obtain a copy of the penalty calculation (from the CAF)
  • change the entries as appropriate
  • when complete, press [Print calculation]; this action will print the calculation sheet but also save the new calculation under a separate date to the original in the CAF (the “Total number of saved calculations” will increase by one)
  • amend the charge on ETMP.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • Issue the revised calculation with letter FPI50 (appeal upheld penalty part due).
  • BF 45 days (30 day appeal period plus 15 days for tribunal to notify HMRC should a tribunal application be received).

The revised charge will be due 30 calendar days after the issue of the FPI50 letter.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If no response is received after 45 days:

  • record this on the spreadsheet
  • cancel the stand-over on ETMP
  • close the IDMS work item
  • file the appeal papers.

Penalty partially due - amount not agreed with employer {.filledcircle}

If you agree part of the penalty should be reduced but not by as much as the employer wanted (for example, they may claim no penalty is due but you may accept only a part reduction):

  • obtain a copy of the penalty calculation (from the CAF)
  • change the entries as appropriate
  • when complete, press [Print calculation]; this action will print the calculation sheet but also save the new calculation under a separate date to the original in the CAF (the “Total number of saved calculations” will increase by one)
  • amend the charge on ETMP.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • Issue revised calculation with letter FPI60 (appeal partially upheld - reduction less than requested).
  • BF 45 days (30 day appeal period plus 15 days for tribunal to notify HMRC should a tribunal application be received).

The revised charge will be due 30 calendar days after the issue of the FPI60 letter.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If no response is received after 45 days:

  • record this on the spreadsheet
  • cancel the stand-over on ETMP
  • close the IDMS work item
  • file the appeal papers.

Penalty should be increased {.filledcircle}

In rare circumstances, the information the employer has submitted may indicate that an increase to the original penalty is required. Where this happens you will need to advise the employer of your intention to increase the penalty. You should:

  • obtain a copy of the penalty calculation (from the CAF)
  • change the entries as appropriate
  • when complete, press [Print calculation]; this action will print the calculation sheet but also save the new calculation under a separate date to the original in the CAF (the “Total number of saved calculations” will increase by one)
  • amend the charge on ETMP
  • issue revised calculation with letter FPI58 (appeal upheld - penalty should be increased)
  • BF 45 days (30 day appeal period plus 15 days for tribunal to notify HMRC should a tribunal application be received)
  • The revised charge will be due 30 calendar days after the issue of the FPI58 letter.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If no response is received after 45 days:

  • record on the spreadsheet
  • cancel the stand-over on ETMP
  • close the IDMS work item
  • file the appeal papers.

Offer a review without settling the appeal {.filledcircle}

You may decide that an appeal cannot progress without the benefit of an internal review (for example, the issues may be very complex and require in-depth research). Where this is the case you should:

  • send letter FPI169 (appeal not settled-IR offered)
  • BF 45 days (30 day appeal period plus 15 days for tribunal to notify HMRC should a tribunal application be received).

Once the BF expires, if the employer does not accept the review offer or notify an appeal to the tribunal within the time limit, the appeal is treated as settled by agreement, you should:

  • cancel the stand-over
  • close the IDMS work item
  • file the papers.

Employer’s response to HMRC’s latest view of the matter (first stage appeal letter)

No response to first stage appeal letter

If the employer does not respond within 30 calendar days the appeal is treated as settled by agreement. You should:

  • cancel the stand-over
  • close the pseudo work item (see DMBM523675)
  • file the papers.

Response received but internal review offer not accepted

The employer may reply but may not accept an internal review offer. For example, they may offer additional information or they may request we reconsider the decision.

If the new information provided affects the case, you should reconsider your decision in light of the new information. If the information does not affect your decision, advise the employer that your decision is the same and the only way to progress the case further is to accept an internal review offer or to go to tribunal.

Goes direct to tribunal without accepting an internal review offer

You will receive notification that the employer has completed a tribunal application from DMB’s Appeals mailbox (Appeals 11). On receipt, follow the guidance at DMBM523690 on tribunal hearings.

Internal review offer accepted

The employer has 30 calendar days, from the date of HMRC’s offer of an internal review to accept the offer or go directly to tribunal. Internal review acceptances should be made in writing. On receipt of a request you should:

  • check that the charge is still stood-over on ETMP
  • record this on the spreadsheet
  • issue letter FPI30 (appeal accepted for internal review) giving the employer ten days to supply any additional information
  • set a 45-day BF
  • pass the papers and template to the internal reviewer.

HMRC have 45 calendar days to conduct the review and reply to the employer. See DMBM523685 on internal reviewer actions for full details.