A fixed automatic penalty can only be capped on receipt of
the return where the tax payable is less than the amount of the
penalty. Such a penalty can be reduced on receipt of the return if
the penalty exceeds the amount of tax payable (TMA70/S93(7)) or
where the taxpayer had a reasonable excuse (see EM4562).
The penalty cannot be varied by the Commissioners.The
Commissioners may however set the determination aside if they are
satisfied that the taxpayer had a reasonable excuse throughout the
period of default (see EM4563).
If the appellant asks for the appeal to be heard by the
Commissioners, explain that they have no power to vary the penalty
which will be reviewed on receipt of the return. If the taxpayer
persists you must list the case for hearing. Under Regulation 3(1)
of the General Commissioners (Jurisdiction and Procedure)
Regulations SI 1994/1812 and Regulation 3(1) of the Special
Commissioners (Jurisdiction and Procedure) Regulations SI 1994/1811
the appellant has the right to serve notice on the Clerk to the
Commissioners that they wish a date for the hearing to be
fixed.
