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HMRC internal manual

Statutory Payments Manual

Penalties - appeals and reviews

An appeal against a penalty determined by HMRC must be made in writing within 30 days of the date of issue of the penalty determination and should specify the grounds of appeal. If it does not you should ask the appellant to provide grounds. There is no special form.

If the grounds are clearly unacceptable, see Appeals, Reviews and Tribunals Guidance. 

An appeal can be made by the person named in the penalty determination or an agent or person acting on behalf of the named person.

Late appeals

Late appeals should be dealt with in the normal way, see Appeals, Reviews and Tribunals Guidance.

Reviews

When a customer appeals to HMRC against a formal decision which includes penalty determinations, they are legally entitled to a review of the decision/determination. They will be offered a review when an appeal has been received by HMRC it will be carried out by an officer of HMRC, who was not previously involved in the penalty determination. A customer who receives a penalty determination and wants to appeal can still notify an appeal to HM Courts and Tribunals Service without HMRC having carried out a review. A customer cannot appeal and request a review at the same.

The aim of a review is to provide an additional opportunity to resolve a dispute without the need of a tribunal hearing. Since reviewing officers will not have been involved in the penalty determination, they will provide a fresh viewpoint. Reviews will therefore make sure that the penalty determination has been both properly made, is legally correct and can be defended before a tribunal.

Reviews have to be carried out within 45 days of the date of request unless the appellant agrees to an extension of this time limit. Both the appellant and decision maker can make representations to the reviewing officer to make sure that their point of view is understood.

The reviewing officer will write to the appellant with the outcome of the review. The customer will then have 30 days from the date of the review letter to notify an appeal to the tribunal.

For more information on reviews see, Appeals, Reviews and Tribunal Guidance  

Withdrawal of appeals

The appellant can withdraw their appeal against a penalty at any time.

If the appellant wishes to withdraw his appeal he is accepting the determination.

If you do not object to the withdrawal of the appeal write to the appellant stating that ‘the offence relating to the Statutory Payment should be made good, and the penalty should be paid within 21 days’. If, after 30 days from the date of application to withdraw, there have been no objections to the application, the decision under appeal is regarded as being upheld without variation from the date of application to withdraw.

If payment is not made, normal enforcement action will continue.

Settlement of appeal by agreement

An appeal against a penalty imposed by HMRC may be settled by agreement with the appellant or their agent. You should try to settle the appeal by agreement with the appellant without recourse to a hearing by the First-tier Tribunal.

An appeal is settled by agreement where:

  • you have offered a review and there is no response within 30 days of the date of the offer
  • the customer does not notify an appeal to the tribunal within 30 days of the date the outcome of review letter was issued
  • you and the appellant come to a written agreement,

for example you either-

* write to the appellant explaining how the penalty should be varied or upheld and the appellant sends his written agreement, or
* give your written agreement to the appellant's proposals
  • you and the appellant come to an agreement otherwise than in writing and then confirms the agreement in writing. You should send written confirmation of the agreement explaining how the determination should be varied or upheld as soon as possible after the oral agreement.
  • the appellant notifies you that he wishes to withdraw his appeal and you do not object within 30 days of his notification. The decision under appeal is regarded as upheld without variation when such a notification is made. If you propose a variation to the appellant’s proposals ask the appellant to give his agreement in writing. Your letter must clearly show your revised proposals. This is to prevent any later dispute as to the extent of the agreement. If no reply to the letter is received after 30 days, you should continue with the appeals process.

The appellant can change their mind about an agreement within 30 days. You should make the appellant aware of their right to withdraw from the agreement.

If the appeal cannot be settled by agreement, HMRC should continue with the appeals process.