ECH21055 - Penalties: Abatement Structure

The abatement structure is designed to arrive

• at an accurate judgement of the appropriate amount of penalty
• where that penalty is expressed not as a fixed amount but
• as a maximum, that is, an 'amount not exceeding'.

The procedure is to start with the maximum penalty and then reduce it by the appropriate percentages for

• the extent of employer's or contractor's disclosure of irregularity ECH21065 and ECH21070
• the extent of employer's or contractor's co-operation throughout the review ECH21075 and ECH21080
• the seriousness of the offences established by the review ECH21085 and ECH21090.

The statutory basis is Section 100(1) TMA 1970.

The abatement structure is how HM Revenue & Customs computes the appropriate penalty, in a negotiated settlement.

ECOs should

• never forget that if it comes to a formal determination, any penalty can be appealed and the Commissioners can review our judgement: Section 100B(2)(b).