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 I don't think they have actually withdrawn the penalty.
Replies (1)
Please login or register to join the discussion.
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.