Taxpayer does not make the expected offer: culpability disputed
If a taxpayer claims that the incorrect account, information or document was notsubmitted fraudulently (IHTM36291) or negligently (IHTM36301) you should consider the arguments on their merits,seeking advice from your manager in any case of doubt or difficulty.
Where the taxpayer admits the offence but considers that you have overstated the degree ofculpability, you will have to discuss (over the phone or at a meeting) the matter with thetaxpayer or his agent and try to reach agreement. The taxpayer will be aware, from leafletIHT 13 what criteria are taken into account in abating (IHTM36177)a penalty, and the relative weight attached to each. You should not enter into protractedcorrespondence about the matter.
Where all correspondence and negotiations to date have been with an agent, you shouldexplain to the agent that any penalty proceedings taken will be against the taxpayers andrequest a meeting with them to hear their views and put your case at first hand. If thisrequest is refused, you should write to all taxpayers concerned, with copies to the agent,setting out your contentions and seeking an offer (or improved offer) of the amount youconsider to be appropriate. You should explain that, in the absence of an offer (orimproved offer) your instructions require you to make a careful overall review of the caseso that the possibility of formal penalty action can be considered.
If the offer made is well below your expected offer and no improvement is forthcoming (This content has been withheld because of exemptions in the Freedom of Information Act 2000) You can say that you do not think thatthe offer is capable of recommendation for acceptance but go no further.
If having tried you cannot secure any offer or an offer that you consider adequate, youshould review the case and refer the case, with a written summary, to your B2 manager. Ifit is agreed that penalty proceeding should be considered, you will have to submit areport (IHTM36362), via the Penalty Portfolio Holder to TaxAdministration Advice (TAA) (IHTM36361), with yourrecommendation about penalty proceedings. Otherwise, your manager will advise you on howto proceed.
There are separate instructions (IHTM36234) for dealing withsituations where the taxpayer disputes the level of culpability, but is prepared to makean acceptable offer.