Simon Sweetman explains HMRC’s new powers to suspend a penalty and discusses the implications for taxpayers and agents.
One of the more interesting aspects of the new powers given to HMRC is the ability to suspend a penalty. Paragraph 14, Schedule 24 FA 2007 says that HMRC may suspend all or part of a penalty for a careless inaccuracy under paragraph 1 by notice in writing to the taxpayer (referred to as P).
However, they may only do this if compliance with a condition of suspension would help P to avoid becoming liable to further penalties under paragraph 1 for careless inaccuracy. This notice can specify action to be taken and a period within which it must be taken.
At the end of that period, if HMRC is satisfied that the conditions of suspension have been complied with, the...