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HMRC internal manual

PAYE Manual

Appeals and reviews: end of year penalty appeals: grounds for appeal

As the penalties are ‘automatic’ the grounds for a successful appeal are limited and can be summarised as follows

  • No employer’s annual return was required

    • If there are no employees / sub contractors for whom a return is required under PAYE Regulations, the Subcontractor Regulations, the Social Security Regulations, or the Tax Credit Regulations
  • The amount of the determination is the wrong multiple of £100 because the wrong number of employees / sub contractors or wrong number of months has been used in calculating it

    • Note that you cannot vary the amount of an End Of Year ‘automatic’ penalty determination for any other reason; if an employer / contractor presses a claim to have the penalty determination reduced or mitigated after you have explained the fixed nature of the amount of the determination, you should refer the claim to Central Policy: Tax Administration Advice, Queens Dock, Liverpool (Employer Compliance)
  • There was a ‘reasonable excuse’ for not making the employers annual return on time

    • Some examples of what might be considered reasonable excuse are given at (PAYE7545)