It is for the Commissioners to decide whether to set the
determination aside, to confirm the penalties as determined, or
whether and by how much to reduce or increase them
(TMA70/S100B(2)). The Act gives them no guidance. If the
Commissioners ask, or if you think that they would welcome it, you
can explain in broad terms the factors taken into account in
deciding the quantum of the determination as explained in leaflets
IR160 or IR73. Strictly speaking, you are quite entitled to do so
because it is clear from the opening words of Section 100B(2) of
the Act that there is no onus on the taxpayer to show that he "is
overcharged". (See also the general observations on onus in CIR v
Garvin 55 TC 24 at 51(- 57E, and 79G-80C.)
Show the Commissioners the schedule prepared by CCP
(Stockport Technical Unit) as part of the review of the case to
decide whether a penalty determination should be made. Point out
the maximum penalties, and then review all the facts, whether for
or against the taxpayer, so that the Commissioners can make their
own assessment of the degree of culpability.
When considering the quantum of a penalty, other than a fixed
penalty, the Commissioners may ask both the Inspector and the
appellant for details of factors which should be taken into
account. Be prepared to answer questions on all aspects of the
case, particularly about the extent of any disclosure, the degree
of co-operation and the relative size and gravity of the case. You
should try to anticipate the appellant’s contentions and be
ready to rebut them if it is appropriate to do so.
If the Commissioners ask whether the tax has been paid, make
it clear to them that this has no bearing on whether or not a
penalty should be awarded or on its amount.
If the penalties include Class 4 NIC, you should explain that
Section 16(1) Social Security Contributions and Benefits Act 1992
applies the income tax code to national insurance contributions.
Although the NIC proceedings are being taken at the same time, and
depend largely on the same evidence, they are technically separate
proceedings for separate penalties and they need to be separately
argued.
