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HMRC internal manual

Specialist Investigations Operational Guidance

HM Revenue & Customs
, see all updates

Settlement by agreement: consideration of penalties: general

The civil penalty position needs to be considered in SI cases of all types and this must be done before negotiations are commenced. Investigators need to consider the penalty position in order to agree with their Team Leader the basis of case settlement. The Team Leader must approve any decision not to pursue penalties. Where penalties do arise the Investigator has to agree their reduction with the Team Leader before the settlement meeting (SIOG9215).

The Penalty Decisions and Actions Checklist (PDAC) is a template which records key decisions and actions relating to new penalties. Its use is mandatory in SI.

The PDAC must be completed in every case where a new penalty needs to be considered. It must be completed whether or not a penalty is charged. Where a penalty is to be charged, the PDAC will be the means by which authorisation is sought from an authorised officer. If a penalty is not to be charged, the PDAC will need to contain an explanation, and it must be approved by a manager.

The PDAC is to be found in SEES in Microsoft Excel: choose ‘Penalties Toolkit’ from the menu. The link to the PDAC is at the top of the next screen.

Guidance on the PDAC may be found at CH407100. FAQs may be found here.

SIOG8430 contains instructions on the approval of penalty determinations and assessments, relating both to ‘new’ (Sch 24) penalties and ‘old’ penalties.