IHTM36233 - Taxpayer does not make the expected offer: culpability disputed

If a taxpayer claims that the incorrect account, information or document was not submitted fraudulently (IHTM36291) or negligently (IHTM36301) you should consider the arguments on their merits,seeking advice from your manager in any case of doubt or difficulty.

Where the taxpayer admits the offence but considers that you have overstated the degree of culpability, you will have to discuss (over the phone or at a meeting) the matter with thetaxpayer or his agent and try to reach agreement. The taxpayer will be aware, from leafletIHT 13 what criteria are taken into account in abating (IHTM36177) a penalty, and the relative weight attached to each. You should not enter into protracted correspondence about the matter.

Where all correspondence and negotiations to date have been with an agent, you should explain to the agent that any penalty proceedings taken will be against the taxpayers and request a meeting with them to hear their views and put your case at first hand. If this request is refused, you should write to all taxpayers concerned, with copies to the agent, setting out your contentions and seeking an offer (or improved offer) of the amount you consider to be appropriate. You should explain that, in the absence of an offer (or improved offer) your instructions require you to make a careful overall review of the caseso that the possibility of formal penalty action can be considered.

If the offer made is well below your expected offer and no improvement is forthcoming (This content has been withheld because of exemptions in the Freedom of Information Act 2000) You can say that you do not think that the offer is capable of recommendation for acceptance but go no further.

If having tried you cannot secure any offer or an offer that you consider adequate, you should review the case and refer the case, with a written summary, to your B2 manager. If it is agreed that penalty proceeding should be considered, you will have to submit areport (IHTM36362), via the Penalty Portfolio Holder to Tax Administration, Litigation and Advice (TALA) (IHTM36361), with your recommendation about penalty proceedings. Otherwise, your manager will advise you on how to proceed.

There are separate instructions (IHTM36234) for dealing with situations where the taxpayer disputes the level of culpability, but is prepared to makean acceptable offer.