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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: surcharge: appeals against surcharge (Decision Makers Action Guide)

This guidance applies from 1 April 2009 to tax years 2009-10 and earlier. Different rules apply to 2010-11 and later years. Guidance regarding tax years 2010-11 onwards can be found under SAM61200 onwards.

This Action Guide for Decision Makers supplements the guidance given in subject ‘Handling an Appeal Against A Charge Based Item’ (SAM10060).

Before moving to step 1 below, the appropriate steps of the Action Guide at SAM10061 should be followed to record and acknowledge the appeal and at SAM11071 to deal with the informal postponement of the surcharge.

When dealing with appeals against surcharge consider the initial action at steps 1 - 4 below and as appropriate steps 2 - 15. The guide is presented as follows.

  Steps 1 - 4
   
  Step 5
  Step 6
  Steps 7 - 10
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  Step 12
  Step 13
  Step 14
  Step 15

 

Note: A request for review is received in the local office See Step 9
   

 

 

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

 

Initial action

1. Check that the appeal is valid. (See SAM10020 for further guidance on ‘Valid Appeals’)
   
2. If the taxpayer has sent their appeal to Tribunal at this stage, follow the guidance in the Appeals, Reviews and Tribunals Guidance (ARTG) manual at ARTG2210 and ARTG8230. Immediately arrange for the relevant papers to be sent to the Business Review Unit (SAM62022)
3. If the taxpayer has asked for a review at the same time as the initial appeal was sent to HMRC, follow the guidance at ARTG2210. The Decision Maker must send a letter explaining our view of the matter and as soon as this has been done the review time limit begins. The relevant papers should then be sent immediately to the Business Review Unit (SAM62022)
4. Consider the grounds for appeal against the reasonable excuses described in subject ‘Reasonable Excuse’ (SAM10090)
  Where the grounds for appeal
  * Involve time to pay, follow guidance ‘Time to pay and surcharge’ at SAM62060 
  * Correspond with (or are very near to ) those in subject ‘ Reasonable Excuse’, go to step 5
  * Resemble one of the reasonable excuses in subject ‘Reasonable Excuse’ go to step 6
  * Seem to be valid but do not appear in subject ‘Reasonable Excuse’ go to step 11
  * Do not fit the reasonable excuse criteria and you wish to resist the appeal go to step 7
  * If payment has not been made, consider steps 12 to 15

Grounds for appeal correspond with those in subject ‘Reasonable Excuse’

5. 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 - appeals putting forward ‘reasonable excuses’ according to the leaflet
  * Using function MAINTAIN SURCHARGE, cancel the surcharge(s)
  * Issue a letter to the taxpayer confirming your decision
  * Using function Maintain Appeal, clear the appeal signal
  * Using function MAINTAIN SA NOTES, record the action taken, location of the papers and grounds for appeal

Grounds for appeal are similar to those in subject ‘Reasonable Excuse’

6. Consider the appeal carefully. If necessary ask the taxpayer for more information / evidence
   
  Where after this consideration
  * There is no doubt that the appeal should be allowed, follow action in step 5
  * You have reached a clear conclusion that the appeal should be resisted, follow action in step 7 - 10
  * You have any remaining doubts about whether or not the appeal should be allowed, follow action in step 11
  * If the taxpayer fails to provide further information requested, the appeal should be resisted - follow steps 7 - 10

Grounds for appeal are clearly unacceptable

| 7. | Issue a letter SA633 (available on SEES) to the taxpayer with a copy to the agent if applicable, setting out the reasons why the taxpayer’s ‘reasonable excuse’ is not accepted and suggest that the taxpayer reconsiders the matter. This letter offers a review and advises the options available to the taxpayer. You should enclose a ‘request for review’ form SA634 (available on SEES) if appropriate | || |   | * Where the payment is still outstanding, ask for it to be made unless the underlying tax is in dispute | |   | * Using function MAINTAIN SA NOTES, record the action taken and the location of the papers | |   | * B/F for 45 days | | 8. | If the taxpayer accepts the decision and withdraws the appeal | |   | * Using function MAINTAIN STANDOVER, remove informal standover * Using function MAINTAIN APPEAL, clear the appeal signal * Using function MAINTAIN SA NOTES, record action taken and location of papers * Send determination of appeal letter | | 9. | If the taxpayer accepts the offer of a review and the request for a review is received in the local office, on day of receipt | |   | * Acknowledge receipt | |   | * Immediately forward all papers/file to the Business Review Unit (BRU) (SAM62022) | |   | * Using function MAINTAIN SA NOTES, record action taken | | 10. | If there is no response in the local office 45 days | |   | * Check SA Notes to see if a request for an internal review has been sent to the Business Review Unit (BRU) (SAM62022) | |   | If review requested | |   | * Take no further action regarding the surcharge | |   | * Ensure that the file/papers have been requested by the Business Review Unit (BRU) and have been sent | |   | * If not, send the papers directly with a covering note | |   | If review not requested | |   | * Issue letter SA636 (Decision Makers deemed determination of appeal) to the taxpayer * Using function MAINTIAN STANDOVER, remove informal standover * Using function MAINTAIN APPEAL, clear appeal signal * Using function MAINTAIN SA NOTES, record action taken and location of papers |

Grounds for appeal seem valid but do not appear in subject ‘Reasonable Excuse’

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Payment has not been made and there is no reasonable excuse

12. Follow steps 7 - 10
   

Payment has not been made and the reasonable excuse is continuing

  Note: Where the grounds for appeal are clearly unacceptable go to step 7 otherwise proceed as below
   
13. If the reasonable excuse is still continuing
  * Advise the taxpayer that you cannot fully consider the appeal until full payment is made
  * Contact the taxpayer again after 30 days to determine if and when the reasonable excuse has come to an end
  * Repeat the step if necessary
  * If taxpayer then fails to respond, follow step 15

Payment has not been made and the reasonable excuse has ended or no longer applies

|   | Note: Where the grounds for appeal are clearly unacceptable go to step 7, otherwise proceed as below | || | 14. | If the reasonable excuse has come to an end | |   | * Allow the taxpayer 14 days to send in payment in full | |   | If the taxpayer still does not send in full payment | |   | * Request that the taxpayer withdraws the appeal
 
And | |   | * Ask the taxpayer to send in payment in full | |   | If the taxpayer does not withdraw the appeal or does not reply, go to step 15 |

The taxpayer fails to respond to your enquiries

15. If the taxpayer fails to provide further information to show that the reasonable excuse is continuing (step 13) or fails to withdraw the appeal (step14), then there is no evidence of any continuing reasonable excuse
   
  * Go to steps 7 - 10 and resist the appeal