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HMRC internal manual

Excise Civil Evasion Penalty

HM Revenue & Customs
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Assessment and notification of an excise civil evasion penalty: notification of penalties to partners

In the case of a dishonest partner, the conduct of that partner causes the partnership to be liable to a penalty and you should assess the penalty on the partnership, not only the dishonest partner or partners. Address the penalty notice in the same way as a duty assessment. This will normally be in the names of the partners and the trading name, for example:

Mr Smith, Mrs Jones and Miss Williams, T/A The Garden Restaurant.

Send the notice to the partnership and a copy to each partner. This approach was supported in the tribunal appeal of Santi Bag Restaurant (MAN/93/1177): The Chairman, Mr. Simpson, said

‘… although no dishonesty was alleged against Mr. Bokth, the penalty assessment was addressed to the partnership. That was the correct course. The dishonest evasion which gave rise to the penalty occurred in the ordinary course of the partnership business, by the suppression of some of the takings of the business. It follows that the partnership, and not merely Mr. Anwar, is liable to the penalty: section 10 of the Partnership Act 1890, and that Mr. Bokth is liable to the penalty jointly with Mr. Anwar and also severally: section 12 of the 1890 Act.’