This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Excise Civil Penalties Manual

How to apply the penalty: The compliance package

The imposition of civil penalties is just one compliance tool available for use. It is important to bear in mind that there are other compliance measures that may be applied as an alternative to the issue of a civil penalty.

You should consider which of the following is likely to have the most positive effect on trader compliance

  • a written warning, this should normally only be issued for a first breach, see ECP5100 
  • the attachment of additional conditions to a trader’s authorisation or approval
  • a civil penalty
  • the use of the powers of seizure and restoration, see ECP6000.

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

When considering the appropriate course of action to take, the prime consideration is the compliance effect of that action.

It is not therefore the intention to have a formal system of warnings before the issue of a penalty. However, for a first breach it may not be appropriate to issue a civil penalty, without first sending in the trader a warning letter.

If you can show beyond reasonable doubt that the taxpayer was, or should have been, aware that they were in breach of legislation, a penalty should be issued regardless of whether any warning letters have been sent.