Penalty mitigation
Atlas Garages (Morpeth) Ltd v HMRC [2022] UKFTT 101 (TC) (17 March 2022) raises a small but important point about penalty mitigation. The maximum penalties which can be charged for incorrect returns can be reduced by refence to ‘telling’ ‘helping’ and disclosure. In 2016 HMRC introduced a policy under which the maximum reduction for disclosure was reduced by 10 percentage points where the inaccuracy was over three years old. This policy was controversial at the time when it was introduced and the taxpayer here challenged the legal basis underlying the policy. The judge agreed that the implications of the decision were potentially confusing to taxpayers as it further complicated an already complex position but found that there was nothing irrational about this new HMRC policy and that its approach fell within the department’s legal powers in calculate penalties. Para 48-59 are...
