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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Interest, penalties and surcharge: penalties: FAP: reasonable excuse appeal against (Decision Makers Action Guide)

This guidance applies to all tax years but for further information regarding the new rules for the tax years 2010-11 and later, see SAM61200 onwards.

This Action Guide for Decision Makers supplements the guidance given at SAM10060 ‘Handling an appeal against a charge based item’ and the Action Guide at SAM10061. Operational guidance can be found in the appeal Action Guides for Individuals and Partnerships.

When dealing with appeals against fixed automatic penalties consider the initial action at steps 1 - 3 below and steps 4 - 10, as appropriate.

The guide is presented as follows

  Step 1 - 3
   
  Step 4
  Step 5
  Step 6
  Step 7
  Step 8
  (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  Step 10

For details of how to access any of the SA functions, select ‘Index Of Functions’ on the left of the screen.

Initial action

1. Is the appeal valid? See ‘Valid Appeals’ (SAM10020). Consider if the return has been received. If not, the appeal cannot be considered until it is.
   
2. If the taxpayer has sent their appeal to tribunal at this stage, follow the guidance in the Appeals, Reviews and Tribunals Guidance manual at ARTG2210 and ARTG8230. Immediately arrange for the relevant papers to be sent to the Appeals Review Unit (ARU) (SAM61064)
3. If the taxpayer has asked for a review at the same time as the initial appeal to HMRC, follow the guidance at ARTG2210. The Decision Maker must explain what our view is and as soon as this has been done, the review time limit begins. The relevant papers must then be passed immediately to the Appeals Review Unit (ARU)

Appeals where the return is outstanding

4. Return is outstanding and
   
  * there is an acceptable reasonable excuse
  Or
  * the excuse is likely to be acceptable if the return is filed within 2 weeks of RE ending
  * Send SEES letter APP02 (APP 11 in partnership cases), using the appropriate options, back to the customer with the appeal
  * Make an SA Note of action taken
  Note: There is no need to keep a copy of the papers, stand over the penalty or BF the case
  Return is outstanding and
  * there is no reasonable excuse
  Or
  * the excuse is unacceptable
  * Log and close the appeal
  * Resist the appeal and send it back with SEES letter SA633 or SA633(P), using the appropriate options, to determine the appeal
  * Make an SA Note of action taken
  Note: There is no need to stand over the penalty or BF the case

Other cases

  * Log the appeal
   
5. Consider the grounds for appeal against the reasonable excuses described in subject ‘Reasonable Excuse’ (SAM10090)

Where the return is held and grounds for appeal correspond with those in subject ‘Reasonable Excuse’

6. Unless there are grounds for suspecting the excuse to be false, allow the appeal.
   
  Note: You would be justifiably suspicious if a taxpayer repeatedly - from year to year - puts forward ‘reasonable excuses’ according to the leaflet
  * Log the appeal
  * Using function AMEND FIXED PENALTIES to cancel the penalty (penalties)
  * Issue a letter to the taxpayer confirming your decision
  * Using function MAINTAIN APPEAL, clear the appeal signal
  * Using function MAINTAIN SA NOTES, record the actions taken and location of the papers and note the grounds for appeal

Where the return is held and grounds for appeal resemble those in subject ‘Reasonable Excuse ’

7. * Log the appeal and consider the appeal carefully
   
  Where, after this consideration,
  * There is no doubt that the appeal should be allowed, follow step 6
  * You have reached a clear conclusion that the appeal should be resisted follow action in step 8
  * You have any remaining doubts about whether or not the appeal should be allowed follow action in step 9

Where the return is held and grounds for appeal are clearly unacceptable

8. * Log the appeal
   
  * Resist the appeal and send SEES letter SA633 (reasonable excuse claim refusal letter) to explain to the customer that the appeal cannot be considered
  * Make an SA Note of action taken. There is no need to BF or postpone the penalties
  * Unlog the appeal

Where the return is held and grounds for appeal seem valid but do not appear in subject ‘Reasonable Excuse’

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

Request for a review received in local office

10. If the taxpayer accepts the offer of a review and the request for a review is received in the local office
   
  On the day of receipt
  * Log the appeal and
  * Postpone the penalty
  * Immediately forward all papers/file to Appeals Review Unit (ARU) (SAM61064)
  * Using function MAINTAIN SA NOTES, record action taken