AH3904 - Appeals Handbook: Appeals against penalties and surcharge: types of penalty: fraud and negligence

Fraudulent or negligent claim to reduce a payment on account (ITSA) (TMA70/S59A(6))

A penalty can be charged where a taxpayer, fraudulently or negligently, makes an incorrect statement in connection with a claim to reduce a payment on account. The penalty is geared to the amount of the incorrect reduction of the payment on account and is determined by an officer of the Revenue & Customs. See EM4660 for more guidance.

The right of appeal is to the General Commissioners, subject to the appellant’s right to elect for the appeal to be heard by the Special Commissioners.

Fraudulently or negligently submitted incorrect return, accounts or claim (TMA70/S95(1), TMA70/S95A(1), FA98/SCH18/PARA20(1), FA98/SCH18/PARA89(1), TMA70/S98A(4) and Social Security (Contributions) Regulations 2001, Reg. 81(2))

These are tax geared penalties determined by an officer of the Revenue & Customs. The right of appeal is to the General Commissioners, subject to the appellant’s right to elect for the appeal to be heard by the Special Commissioners. Frequently, there will be no formal penalty determination because penalties will be included in a contract settlement. For more guidance see EM4800+.

Fraudulently or negligently furnished incorrect information etc required by a notice or provision specified in TMA70/S98(2)

This is a penalty of up to £3,000 for each incorrect return etc . The penalty is determined by an officer of the Revenue & Customs. More guidance is given in EM4901+.

The right of appeal is to the General Commissioners, subject to the appellant’s right to elect for the appeal to be heard by the Special Commissioners.