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HMRC internal manual

Enquiry Manual

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HM Revenue & Customs
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Penalties: Introduction: Any Formal Penalty Determination can be Appealed

Where any disputes arise over penalties, you should first consider whether Alternative Dispute Resolutions (ADR) may help you and the taxpayer resolve them. If the taxpayer or their agent does not agree with the outcome of ADR, they will still be able to make an appeal. See the ADR web pages for guidance about ADR.

Any appeal against a penalty assessment or determination can be reviewed, see ARTG1030, or appealed to the tribunal in the same way as an appeal against an assessment to tax.

Unlike a tax appeal, however, in any penalty appeal the onus of proof is on HMRC to establish the penalty, not on the taxpayer to displace it.

The standard of proof remains the civil one of the balance of probabilities.

From a decision by the First-tier Tribunal either side can appeal to the Upper Tribunal, and then to the Courts on a point of law, including Edwards v Bairstow & Harrison grounds of unreasonableness. However, only the taxpayer can appeal the appropriateness of the amount - TMA70/S100B(3).

In some circumstances, see EM4508, penalties can be determined by a tribunal under S100C. In these now rare cases, the appeal is considered by the High Court, or in Scotland the Court of Session - TMA70/S100C(4).

For more detailed information refer to the Appeals, Reviews and Tribunals Guidance (ARTG).