Share this content

Late payment surcharge and penalty assessment

With help from people here, I appealed a penalty assessment raised under s. 29 TMA.  HMRC agreed there was a reasonable excuse for errors in taxpayer's 2009/10 return, and reduced the penalty to nil.  Subsequently HMRC issued a surcharge under TMA Section 59C(2) for late payment of the same tax.  According to CH404525 HMRC can't impose a penalty and a surcharge in respect of the same tax.  HMRC argue that as the penalty was discharged it is free to impose the surcharge.

Am I being a pedant in thinking that a penalty that has been reduced to nil is still a penalty and is something different to a penalty that has been discharged?  The way I see it, HMRC went down the penalty route and have agreed that the appropriate penalty is zero.  I don't think they have actually withdrawn the penalty.


Please login or register to join the discussion.

17th Jan 2013 17:39

Penalty or Surcharge

My view would be that if HMRC accepted that there was a reasonable excuse, the taxpayer is no longer liable to a penalty and therefore a surcharge may be due.

As I understand, reasonable excuse does not reduce the penalty to a rate of nil but rather mean that the taxpayer is no longer liable to the penalty. 

Thanks (1)