DMBM523685 - Debt and return pursuit: PAYE: penalties for late payment: penalty appeals: internal reviewer actions

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Background

The internal reviewer must not have had any previous involvement in either:

  • raising the penalty
  • considering and issuing HMRC’s latest view of the matter.

The employer has 30 calendar days from the date of the letter containing the internal review offer to accept the offer. HMRC then has 45 calendar days to conduct the review and reply to the employer.

On receipt of the internal review acceptance, your role as internal reviewer is to ensure the decision:

  • was properly made
  • is legally correct (in HMRC’s view)
  • is one that could be defended should the case go to tribunal.

Acceptance of Internal Review offer received out of time

If the employer submits their acceptance of the internal review offer outside the 30-day time limit, and the employer does not have a reasonable excuse for the delay, you can refuse to accept it, however, before doing so you should consider what a tribunal would think.

If you maintain it is correct to refuse, issue letter FPI230 (late review request refusal) advising they acted out of time and therefore the appeal is treated as settled. Where appropriate:

  • request payment in full
  • release for collection
  • close the IDMS pseudo work item
  • update the spreadsheet
  • file papers.

Review case

On receipt of the internal review request papers you should:

  • conduct a full and thorough review of the case following the guidelines in ‘Appendix A Case Review - Points to consider’ at DMBM523695
  • consider any new information supplied by the employer.

Review likely to exceed 45 calendar days

Contacting the customer by phone (recommended)

Phone the customer to ask them to agree to an extension. You should explain that if they do not agree, HMRC have no option but to treat the decision as upheld and they will then have to go to tribunal.

If the customer agrees to an extension, note this on the customer record and proceed with the review. If the customer does not agree to an extension:

  • issue letter FPI101 to advise HMRC will treat the decision as being upheld
  • BF the case 45 days to allow time for a tribunal application.

Once the BF has expired, you can refer for normal enforcement action.

Contacting the customer by letter

Where you cannot contact the customer by phone you should:

  • issue letter FPI100 providing the employer with a new date
  • proceed with the review on the assumption the customer will agree the extension.

If the customer contacts you to say they do not agree to the extension, you should immediately stop the review and BF the case 45 days to allow time for a tribunal application to be processed.

Once the BF has expired, you can refer for normal enforcement action.

See ARTG4850 for more information.

Internal review conclusion

Once you have reviewed the case and decided the outcome, you should issue the appropriate internal review conclusion letter and action as shown in the table below. Your response should fully explain the reasons for your conclusion.(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

HMRC decision upheld

You agree with the original decision made.

  • Review case in full.
  • Record decision on spreadsheet.
  • File papers.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • Issue letter FPI200 (decision upheld option) using freetext option to fully explain your reasons.
  • Save a copy of the letter in the Campaign Internal Review folder.
  • BF 45 days (30 day appeal period plus 15 days for tribunal to notify HMRC should a tribunal application be received).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If employer does not go to tribunal, the appeal is treated as settled by agreement:

  • cancel the stand-over
  • close the IDMS pseudo work item
  • proceed with collection.

If employer goes to tribunal, follow the guidance at DMBM523690 on tribunal hearings.

Original HMRC decision varied

Your decision differs from the original decision (for example, penalty reduced but not in full).

  • Review case in full.
  • Record decision on spreadsheet.
  • Obtain a copy of the penalty calculation (from the CAF).
  • Change the entries as appropriate.
  • When complete, press [Print calculation]; this action will print the calculation sheet but also save the new calculation under a separate date to the original in the CAF (the “Total number of saved calculations” will increase by one).
  • Amend the charge on ETMP.
  • File papers.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • Issue revised calculation letter FPI200 (IR conclusion- appeal varied option) using freetext option to fully explain your reasons.
  • Save a copy of the letter in the campaign internal review folder.
  • BF 45 days (30-day appeal period plus 15 days for tribunal to notify HMRC should a tribunal application be received).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
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  • Issue revised calculation with letter FPI210 (IR conclusion-penalty should be increased).
  • BF 45 days (30 day appeal period plus 15 days for tribunal to notify HMRC should a tribunal application be received).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If employer does not go to tribunal, the appeal is treated as settled by agreement:

  • cancel the stand-over
  • cancel the IDMS pseudo work item
  • proceed with collection.

If employer goes to tribunal, follow the guidance DMBM523695 on tribunal hearings.

Original HMRC decision cancelled

You disagree HMRC’s original decision and penalty should be cancelled.

  • Issue letter FPI220 (IR conclusion-decision cancelled).
  • Save a copy of the letter in the campaign internal review folder.
  • Reduce the charge on ETMP to nil.
  • Record the decision on spreadsheet.
  • Close the IDMS pseudo work item (see DMBM523675).
  • File papers.

Note: If the employer does not take action within the deadline, the appeal is treated as settled under S54 TMA 1970 and normal recovery action can commence. The employer has no further right of appeal.

Notifying DMB’s Appeals 11 mailbox of the internal review outcome

DMB internal review decisions are recorded on a national database. To arrange this, once the outcome of your internal review is known you should email Appeals, 11 (DMB Debt Mgnt Appeals), TRP (DMB Debt Mgmt Operational Support) with the following details:

  • employer name
  • BROCS reference
  • date received
  • type of taxpayer (company, partnership and so on)
  • year to which penalty relates
  • review conclusion.

Employer asks for a second internal review or submits additional information

The employer cannot ask for a second internal review. If they disagree with the outcome of the internal review the next stage is for them to appeal to tribunal (see ARTG4860). If an employer asks for a second review and the circumstances of the case have not changed, issue FPI270 (reject request to revisit conclusion).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)