CH403320 - Charging penalties: calculating penalties: interactions with other penalties: excise wrongdoing
A person who is liable to a penalty for excise wrongdoing under FA08/Sch41 may also be liable to one or more fixed penalties under FA94/S9, see Excise Civil penalties. FA08/Sch41/Para15 says that a wrongdoing penalty must be reduced by the amount of another penalty that is determined by the same tax liability, see CH99000 except for a penalty under FA08/Sch36/Para50 (tax-related penalty for failing to comply with an information notice). This does not apply to FA94/S9 penalties which are fixed penalties not based on an amount of tax liability.
Example
A Road Fuel Testing Unit (RFTU) road side check results in Frank receiving two FA94/S9 penalties of £250 for the acts of taking in and using red diesel on that day.
A post-detection audit identifies that Frank has misused red diesel for 12 months. The amount of duty payable is £20,000.
The FA08/Sch41 penalty should be assessed for the period up to the day before the detection by
- estimating that the potential lost revenue (PLR) of the road side offence was £50 - the duty on a full tank of fuel
- deducting this £50 from the £20,000 PLR identified at the post-detection audit
- assessing a Schedule 41 penalty based on a revised PLR of £19,950.
We do not see a situation where a person who has committed an Excise wrongdoing will get another penalty on the same tax liability. If officers come across a situation where this is the case, they should contact Central Policy, Tax Administration Advice (TAA).
