Penalty shootout

Anton Lane explores the framework for HMRC’s penalty regime, and how this can be negoti ated in practi ce

The legislative framework for penalties was intended to provide fixed parameters so that penalties became more standard for all taxpayers; i.e. treating taxpayers equally. However, whether a penalty is on equal footing for taxpayers is still at the mercy of discussions between the taxpayer and/or their agent and an HMRC officer. 

Taxpayers often believe an HMRC officer has targets that include maximising revenue and charging higher penalties. According to the official voice, that is not the case. So, what considerations might an HMRC officer take into account in agreeing to mitigate a penalty? In this article, I consider the mitigation of tax geared penalties and unusual circumstances faced in practice.

Broadly, tax geared penalties can arise for: