CH285470 - How to do a compliance check: finishing a compliance check: what if something is wrong: when the tax and penalty assessments cannot be issued together

If you cannot issue a penalty assessment at the same time as the related tax/duty assessment or decision notice you must take the following steps.

1. Issue the tax/duty assessment or decision following the guidance for the relevant tax/duty.
2. Tell the person, either in the decision letter or in a separate letter that we are either

• • not considering penalties
  • considering penalties, but need more information before we can make a decision about penalties, or
  • not able to confirm whether we are considering penalties until the tax/duty position is final.

A tax/duty position is final once the review/appeal period has passed, or any ongoing appeals have been finally determined or agreed.

3. If you are able to tell the person about our view of the penalty position at the same time send an NPPS1 form and any other penalty explanation letter with the decision letter.
4. If you are not able to tell the person about our view of the penalty position either take immediate action to obtain any additional details that you need to establish the behaviour, see CH402000, or explain how any penalty will be considered. Use information powers if necessary to avoid delay. When you have sufficient information, or as much as can be obtained to establish the penalty position, tell the person about our view of the penalty by sending them an NPPS1and any penalty explanation letter.
5. Wait for 30 days for the NPPS1, get the penalty authorised and issue the penalty assessment immediately.
6. Send either a covering letter or a separate letter to explain what the person can do if they disagree with the penalty:

• • If they have asked for a review of the related tax/duty assessment, which has not yet been completed, they may ask for a review of the penalty assessment to be carried out at the same time and for both review conclusions to be issued together. If they decide they want this you should contact the review officer as they may have to ask the person to agree an extension to the review period, see ARTG4850.
  • Or, if they have notified their appeal against the related tax/duty assessment to the tribunal and they also wish the penalty to be heard by the tribunal, they can ask the tribunal to hear both appeals together.

If you become aware that the appeals against the tax/duty assessment and the penalty assessment are being heard separately, you should check that the person was told that they could, if they wish, contact the Tribunals Service to ask them to arrange for their appeals to be heard together. HMRC cannot require the tribunal to hear them together.