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HMRC internal manual

Excise Civil Penalties Manual

The penalty process: Monitoring payment and notifying debt

Action to be taken by assessing officer when notifying penalties

Step 1

Before notifying the penalty, the assessing officer must telephone the relevant accounting centre responsible for the revenue assessments specified in the contact list at ECP7600, to obtain a unique local Assessment Reference Number (ARN)

Step 2

Upon being advised of the ARN the assessing officer must

  • immediately record the allocated ARN in the top right hand corner of all copies of Form EX601 - E.G. ‘ARN GR 15/04’
  • otherwise complete the rest of the form in accordance with the guidance, and
  • have the completed form checked and authorised as appropriate. 

Step 3

The assessing officer must then notify the assessment by sending to the trader the following

  • the top and second (remittance) copies of the EX601*
  • an explanatory letter clearly stating the basis of the assessment, see, ECP7200 
  • any schedule
  • a copy of Form EX603 Explanatory notes
  • immediately sending the third (accounting) copy of the EX601 to the relevant accounting centre

The fourth copy of the EX601 should be retained in the trader’s file. (This copy will be needed if in the event of any queries, requests for departmental review or appeals to tribunal)

*Batch each copy of any EX601A continuation sheet that forms part of the penalty advice with its counterpart from the EX601 and dispose of each set as a single item. The top copy of Form EX601A is for the trader, the second copy is the keying (accounting) copy and the third copy is to be retained in the trader’s file.

Note the ARN on each copy of the EX601A.

Assessing officer action when request for review/appeal is received or penalty is withdrawn/amended

The assessing officer must notify the relevant accounting centre immediately where a request for review/appeal is received or the penalty is withdrawn or amended.

Accounting centre action when notified by assessing officer of penalty assessment

Step 1

Issue the ARN to assessing officer. The accounting centre should request and record

  • the trader’s name and registration number
  • the amount and type of penalty assessed
  • the assessing officers name, telephone number and email address.

The accounting centre must keep a list of ARNs issued.

The format of the ARN should be the accounting centre initials followed by the sequential number and the year - e.g. GR 01/01, GR 02/01 etc, for penalties processed by Greenock accounting centre.

Step 2

Contact the assessing officer if the relevant accounting copy of Form EX601 has not been received within 10 calendar days of the issue of the ARN.

Accounting centre action when EX601 received without any recorded ARN

Should an EX601 be received without any recorded ARN, one should be allocated upon receipt. The accounting centre should

  • advise the assessing officer to note the ARN on the fourth (file) copy of the EX601
  • remind them about the need to obtain an ARN prior to notifying the penalty.
    Persistent lapses from this procedure should be advised to the assessing officer’s manager.

Note: ARN records kept by accounting centres must provide a full audit trail control record of all penalties notified.

Accounting centre action when advised of a request for review/appeal or withdrawal/amendment of penalty

For debts already reported by the accounting centre to the DMU, the accounting centre is to notify the DMU immediately where a request for review/appeal is advised or the penalty is advised as withdrawn or amended.

Accounting centres may continue to issue reminders or notify unpaid debts to the DMU in accordance with notional practise.

Accounting centre action where debt remains unpaid 30 calendar days after issue of the penalty

Recovery of the excise debt cannot commence until the statutory 30 day penalty review period has expired. The DMU must be advised immediately if the debt remains unpaid 30 calendar days after issue of the penalty.

DMU action when payments received or time to pay agreement made

The DMU is to advise the accounting centre of payments received and time to pay agreements.