ECH21085 - Penalties: Abatement for Seriousness

This abatement is not concerned with what happens during the review (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.

Gravity

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

The ECO needs 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?).

See also ECH21090.