HMRC Wrongdoing Penalties
What Is A Wrongdoing Penalty?
A wrongdoing penalty is penalty is issued by HMRC where they feel that a wrongdoing has been committed resulting in funds due to the Crown which have not been paid including Excise Duty or Vat sums. A wrongdoing penalty could have Criminal Implications, and therefore HMRC are required to issue a Human Right Act notice setting out that under Article 6 you have the right not to answer HMRC’s questions (which is also known as the right not to self-incriminate or the right to silence).
It is vitally important that you seek legal advice at the earliest opportunity to ensure that you are fully aware of the claims being made and the implications. A wrongdoing penalty can be issued in addition to an HMRC Assessment. In certain circumstances a wrongdoing penalty issued to a business can also be crossed over to a director/ partner personally so it is vitally important that legal advice is obtained as soon as possible.
HMRC may issue a wrongdoing penalty where they feel that a wrongdoing has been committed resulting in sums due to the Crown which have not been paid. Wrongdoing penalties and may have criminal implications so it is important to seek legal advice as soon as you can to enable you to fully understand HMRC’s position against you, the charges you are facing and the potential outcomes.
In certain circumstances where a wrongdoing penalty has been issued to a business, HMRC can cross the Liability Over To Directors or partner personally, and therefore it is important that you seek legal advice as soon as you receive any correspondence regarding an assessment or penalty from HMRC, even if it is just a warning, as you may be able to prevent the matter from escalating.
“I cannot be thankful enough to Rebecca and Altion Law for the service and help I received, through a very difficult time. After being refused the AWRS Rebecca and Altion Law helped over turned HMRCs decision successfully”.
– HMRC AWRS CLIENT
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HMRC will usually write to you to advise of their intention to issue a wrongdoing penalty prior to issuing it, setting out their reasons, as well as asking for information or comments from you.
As there could be criminal implications, any notice of intention to issue a wrongdoing penalty should include a Human Rights Act notice setting out that you do not have to answer HMRC’s questions.
It is important to seek advice as soon as possible to ensure that you understand the position in full. If information is disclosed it could reduce any penalty issued, however it may also prejudiced your position so it is important the full implications of what is involved.
HMRC will not usually charge you a penalty for a VAT or Excise wrongdoing if all of the following apply:
- You have a reasonable excuse for the wrongdoing
- The wrongdoing was not deliberate
- You notified HMRC without unreasonable delay after your reasonable excuse ended
HMRC will take various matters into account when calculating a wrongdoing penalty, including the amount of Potential Lost Revenue (PLR) and the behaviour behind the wrongdoing.
When assessing the behaviour HMRC consider whether the wrongdoing was:
• Deliberate and concealed;
• Whether the disclosure was prompted by HMRC or volunteered.
Where a deliberate wrongdoing penalty is issued, HMRC may start to pay closer attention. Where a deliberate wrongdoing penalty is issued to a business, this could also be crossed over to a director or partner personally in certain circumstances so it is important to understand what HMRC are claiming and how this could impact you.
Once a Wrongdoing Penalty is formally raised, you are able to request a review of the decision where the matter will be considered by an alternative HMRC officer which was not involved in the original issuing of the assessment. That officer will consider the matter in full before providing their review decision to you. Be aware that the time frame to request a review is usually 30 days from the date of the original decision, and HMRC usually have 45 days to provide their review decision.
If you still dispute the outcome once the review decision has been issued, you can appeal the review decision to the Tax Tribunal. The Tax Tribunal is similar to a court however the procedure is less formal. Any appeal to the Tax tribunal must be made within 30 days of the date of the written review decision issued to you.
There may also be circumstances where you can appeal an original wrongdoing penalty decision straight to the Tax Tribunal and avoid requesting a review by an alternative HMRC officer. It is important to seek legal advice on your matter as soon as possible, as the costs and time frame may well affect your decision in how to push forward.
If the Wrongdoing Penalty is not disputed by you, then HMRC will deem that the sums are accepted as due by you and will pursue you for these sums. HMRC may also take other actions as well, and could consider crossing any deliberate wrongdoing penalty across to directors and partners personally, so it is important to understand the implications of any wrongdoing penalties issued as soon as possible to allow you to understand the full picture.
It is vitally important to seek legal advice at the earliest stage to ensure that any evidence or information in dispute of a sum claimed by HMRC is presented accurately and as quickly as possible. Failure to take the correct action may have serious consequences for your business.
Altion Law are specialists at advising and representing parties who have received HMRC assessments and wrongdoing penalties from HMRC. Altion Law can advise:
• Whether you are even the correct party for HMRC to pursue;
• Whether there are any additional risks, such as further assessments or penalties against company directors personally.
• Whether there are any defences available to you.
Make An Enquiry Today
Altion Law are specialists at advising and representing parties who have received HMRC assessments and wrongdoing penalties from HMRC. If you would like to have a confidential discussion with a member of our team, please either make an Online Enquiry or call us directly on01908 414990 and we will be pleased to help you.
“Professional and honest service who certainly know their business. Kept informed all of the time and it was smooth successful process”.