CH301000 - Human Rights Act and Penalties: how to determine whether a person is liable to a penalty

The fact of being liable to a penalty is often referred to as culpability.

Once you have issued the HRA message and the person has confirmed that they understand their rights, see CH300500, you will need to establish why and how something was wrong.

Until you have established all the facts you will not be able to decide whether what is wrong is culpable, that is, whether the person is liable to a penalty. The nature of the behaviour that you will need to consider depends on the relevant penalty legislation.

To establish culpability you must be confident that you have sufficient evidence about the behaviour to convince a reviewing officer or tribunal that on a balance of probabilities the person is liable to a penalty. Even though a penalty is considered to be ‘criminal’ under Article 6 ECHR, the evidential standard remains the civil standard of “the balance of probabilities” and not the criminal standard of “beyond all reasonable doubt”.

For failures to notify, VAT & Excise wrongdoing, and the withholding of information by failing to file returns, you need to check that the person did not have a reasonable excuse.

For guidance about reasonable excuse, see CH160000.

It is important that you do not express any opinion on the degree of culpability until you have

• gathered and considered all the facts
• made any appropriate referral to the Evasion Management Team.

For further guidance about the timing of the HRA message and what to do, where there is a suspicion of evasion, see CH301100.

It is possible that the person or their agent will want to discuss your view of the person’s behaviour as soon as you mention that you may have found something wrong and/or there is a possibility that a penalty may be due. You should resist all attempts to do so before you have issued the HRA message, see CH300500 and CH300600, and established all the relevant facts. You should tell the person that you will discuss whether or not we will charge a penalty and your view of the behaviour once all the facts have been established and you have considered them.

This would be an ideal opportunity to remind the person of any outstanding documents or information you require to progress your compliance check.

You may also want to explain that if the person chooses not to answer your questions you can use your information powers to get any information or documents you need to complete your compliance check, see CH23050. This includes information and documents that will help you establish whether they may be liable to a penalty including the reasons why something is wrong and the person’s behaviour. You must not however use information powers to request any information that is dependant on the person’s testimony. This is because they have the right not to incriminate themselves when we are considering penalties which are considered to be ‘criminal’ under Article 6.

You must issue factsheet CC/FS2 (GOV.UK) - Information Notices, if you give or send them an information notice.