ECH22018 - Settlement: Culpability - What Does it Mean?

Historically training for ECOs told them that culpability meant 'blameworthiness'. Whilst this is one dictionary definition it does not make clear what HM Revenue & Customs mean by this expression.

In general terms 'culpability' means

• being at fault.

The culpable tax, NICs and so on are

• the amounts outstanding because of the employer's or contractor's default.

Being 'at fault' is important to HM Revenue & Customs ability to

• 'discover' further liabilities for closed years and
• recover them by assessment, determination or decision.

Very often to make a 'discovery' ECOs have to show that liability is outstanding because of the fraudulent or negligent conduct of the employer or contractor (or someone acting on his behalf).

Most commonly, being 'at fault' is important to HM Revenue & Customs ability

• to seek penalties, see ECH22019.