ECH21085 - Penalties: Abatement for Seriousness

This abatement is not concerned with what happens during the compliance check (unless irregularities continue whilst it is going on). But it requires appraisal of the circumstances that resulted in a loss of Tax or NIC under two sub-headings which are inter-related, that is, size and gravity.

Size

Size means quantity and should be considered in both absolute and relative terms. For example a settlement of £250,000 on an employer who pays us £24M per year in employee deductions is not large in relative terms but it is in absolute terms when considering the impact on the exchequer.

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Gravity

Gravity means the level of seriousness of the offence. This can range from serious evasion with concealment to simple negligence associated with muddle or confusion.

You need to consider

the nature and seriousness of the irregularities
the number of irregularities
who was responsible for instigating the irregularities
why the irregularities took place
the number of years involved
the size in both absolute terms (is that a large amount of money in anyone's language?) and relative terms (what proportion of the true liability was understated?).

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)