The case of King v UK (TCL 3746) involved appeals against
penalties. The European Court of Human Rights decided that
tax-geared penalties under Section 95 TMA are criminal charges for
the purposes of Article 6 of the European Convention on Human
Rights (the right to a fair and public hearing within a reasonable
time). The Court also criticised us for the unreasonable delay in
that case in making the penalty determination once the tax
determination had become final. We now accept that all of our
(direct tax) tax geared penalties where the maximum is100% of the
tax difference or tax unpaid are similarly subject to Article but
it is important to remember that these remain civil penalties, they
are not criminal in the usual domestic sense and the evidence
standard remains as balance of probabilities. We do not accept
Article 6 applies to any other of our penalties.
Our current procedures at EM 1362 et seq are generally
consistent with a taxpayer’s Article 6 rights but it is
important, given the criticism in King, that there is minimal delay
in listing appeals against penalties for hearing by the
Commissioners if a contract settlement is not in prospect. If the
delay is by the Commissioners themselves you should prompt them to
speed matters up. Commissioners were also criticised for delay in
King. If further guidance is required contact Central Policy, Tax
Administration Advice Team (Stockport).
