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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Calculating the penalty: penalty calculation form

You can access a copy of this form in the “Penalties” folder on the IHT Knowledge Tree.

The form is in Excel spreadsheet format and calculations are performed automatically when you enter figures in the appropriate boxes. The form is protected in the Penalties folder as read only. You will need to save the sheet to your Z drive and remove the protection through the “Tools” menu to enable you to use the form. You will note that certain default figures are entered on the sheet, you should click in the cell and overtype with the correct figures. All the calculations, apart from the calculation of the culpable tax will then be done for you.

When you have completed the form on screen, you should print a copy, initial the “proposed” box and enter the date in the box to the right. You should then pass the form, a brief summary of the essentials and the file to your SO manager for approval.

You should record details of the abatements you have allowed on COMPASS. To do so, select the relevant penalty record, click on the “calculator” button and enter the amounts allowed for the three named categories. Use the unnamed box for any other adjustment you allowed, perhaps to reflect proportionality, in arriving at the penalty. The result does not have to match exactly the penalty that was charged. Click on OK to save the data.