SAM61063 - Interest, penalties and surcharge: penalties: appeals against non-capping of FAP (Action Guide)

This guidance refers to tax returns received for 2009-10 and earlier. For further information regarding the new rules for the tax years 2010-11 and later, see SAM61200 onwards.

You will find general information on the handling of appeals in the business area ‘Appeals / Postponements’. When dealing with appeals against non-capping of fixed automatic penalties follow steps 1 - 12 as appropriate below.

Remember that before you can settle a reasonable excuse appeal against a fixed automatic penalty, the overdue return must be filed.

The guide is presented as follows

	Step 1
	Steps 2 - 4
	Step 5
	Steps 6 - 8
	Steps 9 - 12

Initial action

1.	Check whether the return has been filed and captured using function MAINTAIN RETURN SUMMARY
	If the return has been captured
	* Go to step 2
	If the return has been filed but not captured
	* Go to step 5
	If the return has not been filed
	* Go to step 6

Return captured

2.	Using function VIEW STATEMENT
	* Check that the total tax due for the year (shown in box 1 of the Tax Calculation Summary page TCS1; box 18.3 for years to 2006-07) minus any amounts paid at the filing date is equal to or more than the amount of the fixed automatic penalties charged
3.	If the amount payable is £100 (or £200 where the second penalty has been raised) or more
	* Take no further action in connection with capping (the penalty is valid)
	If the amount payable is less than £100 (or £200 where the second penalty has been raised) the penalty will have been capped automatically for returns for 2001-2002 and later years. But for returns for earlier years take the following action
	* Send a WAM to ‘London North West Recovery’ entitled ‘Type 10 remission - SA Fixed Penalty Capping case’ to ask the Recovery Office to reduce (cap) the penalty
	The Recovery Office will partially remit under Class 10 (cap) the fixed penalty to the amount of tax payable.
	If there is nothing payable
	* Cancel the penalty using function AMEND FIXED PENALTIES
4.	After you have dealt with the appeal
	* Follow steps 10 - 13 below

Return filed but not captured

5.	If the return has been filed but not captured
	* Arrange early processing
	And after capture
	* Proceed as in steps 2 - 4 above

Return not filed

6.	Write to the taxpayer explaining that
	* You need the return to prove the claim for relief
	* The penalty remains due and payable in the meantime
7.	If you believe that further tax may be due
	* Ask the Recovery Office to make a Revenue determination
	But do not do so just to force receipt of the return. You must have some clear indication that further tax is due.
8.	After writing to the taxpayer as in 6 above
	* Follow steps 10 - 13 below

Final actions - all cases

	After you have dealt with the taxpayer’s claim
9.	Close the appeal using function MAINTAIN APPEALS
10.	Cancel the informal standover using Function MAINTAIN STANDOVERS
11.	Record the action taken using function MAINTAIN SA NOTES
12.	Advise the taxpayer of the outcome of the claim