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Introduction to penalties
A4.501 The harmonised penalty regime and other matters
Background to the harmonised penalty regime
When the Inland Revenue and Customs & Excise merged in 2005 to form HMRC, a patchwork of separate penalty provisions relating to the various direct and indirect taxes now within its remit were inherited.
Harmonisation of the penalty and other compliance provisions applying to the taxes administered by HMRC was seen as highly desirable, and a radical review of the various provisions was undertaken by way of the HMRC project 'Modernising Powers, Deterrents, and Safeguards'. A substantial part of that project was devoted to developing a unitary penalty system which could be applied across all taxes, direct and indirect.
The harmonised penalty regime
The legislation to implement the new system referred to above (the 'harmonised penalty regime') has been introduced in stages but has not been completed across the full range of taxes.
The main elements of the harmonised penalty regime are set
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