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HMRC internal manual

Enquiry Manual

Penalties: formal determinations: the offences

When you are completing the Penalty Decision Action Checklist (PDCA) and/or the AO Report Form, see EM5205, you must consider each year, one offence at a time.

This is because if the penalties are authorised, the Authorising Officer will consider each offence for each year - not one lump sum simply labelled “penalties”.

You should therefore

  • identify each offence and the precise statutory provision that applies for the penalty you are seeking
  • for failure offences, show that you can prove to the tribunal’s satisfaction that the failure took place and that the taxpayer does not have a reasonable excuse EM5152
  • for inaccuracy offences, show that you can prove to the tribunal’s satisfaction that the return etc was incorrect and that it was delivered fraudulently or negligently (deliberately or carelessly in the penalty is under FA07/SCH24 or FA08/SCH41) by the taxpayer
  • for all offences, show that penalty action is not time-barred: TMA70/S103 (see EM5001), FA07/SCH24/Para13 and FA08/SCH41/Para16. The PDAC and/or the AO Report Form will provide your Authorising Officer with an audit trail to confirm this.