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HMRC internal manual

Specialist Investigations Operational Guidance

HM Revenue & Customs
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Settlement by agreement: consideration of penalties: Commissioners of Revenue and Customs policy - penalty loading

This instruction applies to penalties charged for periods earlier than those to which Sch 24 FA 2007 and Sch 41 FA 2008 apply. For Sch 24 and Sch 41, see the Compliance Handbook.

The Commissioners of Revenue and Customs policy in arriving at a money settlement applies to those SI cases that are subject to money settlement, as it does to cases from other parts of HMRC. It is to abate the maximum statutory penalties to an appropriate percentage (the ‘penalty loading’) of the culpable tax recoverable by assessment for all years which are not time barred for penalty action (see EM6052).

The abatement policy is carried out under the authority of section 100 TMA 1970, which allows an authorised officer to impose a penalty set at such amount as, in his opinion, is correct or appropriate. It should not be confused with the Commissioners power of mitigation under section 102 TMA 1970 (see EM5310).